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Quantchabot has detected a promising Long Risk Reversal trade opportunity for FIAT CHRYSLER AUTO NV (FCAU) for the 23-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FCAU was recently trading at $12.96 and has an implied volatility of 38.48% for this period. Based on an analysis of the options available for FCAU expiring on 23-Oct-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $12.96-$14.68 at expiration. In this scenario, the average linear return for the trade would be 15.60%.
Big 8.63% Change: After closing the last trading session at $11.93, FIAT CHRYSLER AUTO NV opened today at $13.15 and has reached a high of $13.15.
Trade approach: A movement as big as 8.63% is a significantly bullish indicator, so this trade is designed to be profitable if FCAU maintains its current direction and does not revert back to pricing on the bearish side of $12.96 on 23-Oct-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 FIAT CHRYSLER AUTO NV closes at or above $12.95 on 23-Oct-2020. Based on our risk-neutral analysis, there is a 50.30% 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.