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Quantchabot has detected a promising Short Risk Reversal trade opportunity for TEEKAY TANKERS (TNK) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TNK was recently trading at $15.46 and has an implied volatility of 88.61% for this period. Based on an analysis of the options available for TNK expiring on 17-Jul-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $10.92-$15.46 at expiration. In this scenario, the average linear return for the trade would be 60.29%.
Big -8.06% Change: After closing the last trading session at $16.81, TEEKAY TANKERS opened today at $16.75 and has reached a low of $15.32.
Trade approach: A movement as big as -8.06% is a significantly bearish indicator, so this trade is designed to be profitable if TNK maintains its current direction and does not revert back to pricing on the bullish side of $15.46 on 17-Jul-2020. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if TEEKAY TANKERS closes at or below $15.55 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 50.67% 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.