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Quantchabot has detected a promising Long Risk Reversal trade opportunity for SCHLUMBERGER (SLB) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SLB was recently trading at $17.73 and has an implied volatility of 64.04% for this period. Based on an analysis of the options available for SLB expiring on 19-Jun-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $17.62-$22.40 at expiration. In this scenario, the average linear return for the trade would be 59.06%.
Big 9.81% Change: After closing the last trading session at $16.15, SCHLUMBERGER opened today at $16.95 and has reached a high of $17.79.
Trade approach: A movement as big as 9.81% is a significantly bullish indicator, so this trade is designed to be profitable if SLB maintains its current direction and does not revert back to pricing on the bearish side of $17.73 on 19-Jun-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 SCHLUMBERGER closes at or above $17.56 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 50.58% 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.