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Quantchabot has detected a promising Long Risk Reversal trade opportunity for CLOOPEN GROUP HOLDING LTD (RAAS) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RAAS was recently trading at $13.09 and has an implied volatility of 97.17% for this period. Based on an analysis of the options available for RAAS expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $13.09-$18.30 at expiration. In this scenario, the average linear return for the trade would be 88.45%.
Big 7.74% Change: After closing the last trading session at $12.15, CLOOPEN GROUP HOLDING LTD opened today at $12.30 and has reached a high of $13.15.
Trade approach: A movement as big as 7.74% is a significantly bullish indicator, so this trade is designed to be profitable if RAAS maintains its current direction and does not revert back to pricing on the bearish side of $13.09 on 21-May-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 CLOOPEN GROUP HOLDING LTD closes at or above $12.80 on 21-May-2021. Based on our risk-neutral analysis, there is a 52.68% 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.