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Quantchabot has detected a promising Long Risk Reversal trade opportunity for NVIDIA (NVDA) for the 1-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NVDA was recently trading at $241.72 and has an implied volatility of 60.52% for this period. Based on an analysis of the options available for NVDA expiring on 1-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $241.96-$294.01 at expiration. In this scenario, the average linear return for the trade would be 39.52%.
Big 13.65% Change: After closing the last trading session at $212.69, NVIDIA opened today at $229.00 and has reached a high of $244.17.
Trade approach: A movement as big as 13.65% is a significantly bullish indicator, so this trade is designed to be profitable if NVDA maintains its current direction and does not revert back to pricing on the bearish side of $241.72 on 1-May-2020. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if NVIDIA closes at or above $241.30 on 1-May-2020. Based on our risk-neutral analysis, there is a 50.56% likelihood of this return.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the Quantcha Options Search Engine.