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Quantchabot has detected a promising Long Risk Reversal trade opportunity for BARCLAYS (BCS) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BCS was recently trading at $8.97 and has an implied volatility of 46.08% for this period. Based on an analysis of the options available for BCS expiring on 16-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $8.92-$10.62 at expiration. In this scenario, the average linear return for the trade would be 36.51%.
52 week high: BARCLAYS recently reached a new 52-week high at $8.97. BCS had traded in the range $3.41-$8.79 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 BCS maintains its current direction and does not revert back to pricing on the bearish side of $8.97 on 16-Apr-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 BARCLAYS closes at or above $8.90 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 50.55% 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.