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Quantchabot has detected a promising Long Risk Reversal trade opportunity for VIACOMCBS INC CLASS B (VIAC) for the 12-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VIAC was recently trading at $46.24 and has an implied volatility of 55.32% for this period. Based on an analysis of the options available for VIAC expiring on 12-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $46.25-$54.08 at expiration. In this scenario, the average linear return for the trade would be 20.71%.
52 week high: VIACOMCBS INC CLASS B recently reached a new 52-week high at $46.48. VIAC had traded in the range $10.10-$42.59 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if VIAC maintains its current direction and does not revert back to pricing on the bearish side of $46.24 on 12-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 VIACOMCBS INC CLASS B closes at or above $46.07 on 12-Feb-2021. Based on our risk-neutral analysis, there is a 50.98% 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.