Big Gainer Alert: Trading today’s 7.4% move in BP $BP

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Quantchabot has detected a promising Long Risk Reversal trade opportunity for BP (BP) for the 24-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

BP was recently trading at $23.75 and has an implied volatility of 71.06% for this period. Based on an analysis of the options available for BP expiring on 24-Apr-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $23.77-$29.30 at expiration. In this scenario, the average linear return for the trade would be 15.98%.

Big 7.37% Change: After closing the last trading session at $22.12, BP opened today at $23.93 and has reached a high of $24.41.

Trade approach: A movement as big as 7.37% is a significantly bullish indicator, so this trade is designed to be profitable if BP maintains its current direction and does not revert back to pricing on the bearish side of $23.75 on 24-Apr-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 BP closes at or above $23.23 on 24-Apr-2020. Based on our risk-neutral analysis, there is a 54.36% 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.