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Quantchabot has detected a promising Long Risk Reversal trade opportunity for HEICO CORP (HEI) for the 15-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HEI was recently trading at $84.50 and has an implied volatility of 49.29% for this period. Based on an analysis of the options available for HEI expiring on 15-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $84.51-$94.06 at expiration. In this scenario, the average linear return for the trade would be 24.26%.
Big 7.38% Change: After closing the last trading session at $78.69, HEICO CORP opened today at $81.05 and has reached a high of $84.67.
Trade approach: A movement as big as 7.38% is a significantly bullish indicator, so this trade is designed to be profitable if HEI maintains its current direction and does not revert back to pricing on the bearish side of $84.50 on 15-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 HEICO CORP closes at or above $83.95 on 15-May-2020. Based on our risk-neutral analysis, there is a 52.49% 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.