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Quantchabot has detected a promising Long Risk Reversal trade opportunity for WALT DISNEY (DIS) for the 1-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DIS was recently trading at $94.10 and has an implied volatility of 59.66% for this period. Based on an analysis of the options available for DIS expiring on 1-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $94.20-$114.71 at expiration. In this scenario, the average linear return for the trade would be 46.52%.
Big 9.73% Change: After closing the last trading session at $85.76, WALT DISNEY opened today at $92.33 and has reached a high of $95.10.
Trade approach: A movement as big as 9.73% is a significantly bullish indicator, so this trade is designed to be profitable if DIS maintains its current direction and does not revert back to pricing on the bearish side of $94.10 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 WALT DISNEY closes at or above $93.79 on 1-May-2020. Based on our risk-neutral analysis, there is a 50.87% 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.