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Quantchabot has detected a promising Long Risk Reversal trade opportunity for YY INC. (YY) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
YY was recently trading at $88.68 and has an implied volatility of 71.38% for this period. Based on an analysis of the options available for YY expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $88.42-$126.62 at expiration. In this scenario, the average linear return for the trade would be 80.13%.
Big 20.39% Change: After closing the last trading session at $73.66, YY INC. opened today at $84.22 and has reached a high of $90.73.
Trade approach: A movement as big as 20.39% is a significantly bullish indicator, so this trade is designed to be profitable if YY maintains its current direction and does not revert back to pricing on the bearish side of $88.68 on 19-Feb-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 YY INC. closes at or above $87.65 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 50.97% 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.