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Quantchabot has detected a promising Long Risk Reversal trade opportunity for MAGNITE INC. COMMON STOCK (MGNI) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MGNI was recently trading at $13.51 and has an implied volatility of 72.20% for this period. Based on an analysis of the options available for MGNI expiring on 15-Jan-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $13.51-$17.99 at expiration. In this scenario, the average linear return for the trade would be 56.64%.
Big 12.02% Change: After closing the last trading session at $12.06, MAGNITE INC. COMMON STOCK opened today at $12.20 and has reached a high of $13.75.
Trade approach: A movement as big as 12.02% is a significantly bullish indicator, so this trade is designed to be profitable if MGNI maintains its current direction and does not revert back to pricing on the bearish side of $13.51 on 15-Jan-2021. 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 MAGNITE INC. COMMON STOCK closes at or above $13.00 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 55.39% 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.