Big Gainer Alert: Trading today’s 11.2% move in TRANSOCEAN $RIG

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Quantchabot has detected a promising Long Risk Reversal trade opportunity for TRANSOCEAN (RIG) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

RIG was recently trading at $1.48 and has an implied volatility of 139.80% for this period. Based on an analysis of the options available for RIG expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $1.48-$2.98 at expiration. In this scenario, the average linear return for the trade would be 151.97%.

Big 11.22% Change: After closing the last trading session at $1.33, TRANSOCEAN opened today at $1.45 and has reached a high of $1.48.

Trade approach: A movement as big as 11.22% is a significantly bullish indicator, so this trade is designed to be profitable if RIG maintains its current direction and does not revert back to pricing on the bearish side of $1.48 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 TRANSOCEAN closes at or above $1.43 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 51.96% 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.