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Quantchabot has detected a promising Long Risk Reversal trade opportunity for ULTA BEAUTY INC (ULTA) for the 3-Apr-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ULTA was recently trading at $186.56 and has an implied volatility of 136.33% for this period. Based on an analysis of the options available for ULTA expiring on 3-Apr-2020, there is a 34.34% likelihood that the underlying will close within the analyzed range of $186.40-$230.86 at expiration. In this scenario, the average linear return for the trade would be 54.46%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, ULTA BEAUTY INC was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.
Trade approach: The recent sentiment change in ULTA on StockTwits appears to be significantly positive, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bullish strategy could prove effective if the sentiment ultimately turns out to drive trading.
Upside potential: Using this bullish strategy, the trade would be profitable if ULTA BEAUTY INC closed at or above $184.65 on 3-Apr-2020. Based on our analysis, there is a 51.97% 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.