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Quantchabot has detected a promising Short Risk Reversal trade opportunity for OWENS & MINOR (OMI) for the 17-Jul-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
OMI was recently trading at $7.27 and has an implied volatility of 82.80% for this period. Based on an analysis of the options available for OMI expiring on 17-Jul-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $5.25-$7.27 at expiration. In this scenario, the average linear return for the trade would be 40.71%.
Big -9.13% Change: After closing the last trading session at $8.00, OWENS & MINOR opened today at $7.93 and has reached a low of $7.26.
Trade approach: A movement as big as -9.13% is a significantly bearish indicator, so this trade is designed to be profitable if OMI maintains its current direction and does not revert back to pricing on the bullish side of $7.27 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 OWENS & MINOR closes at or below $8.10 on 17-Jul-2020. Based on our risk-neutral analysis, there is a 63.04% 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.