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Quantchabot has detected a promising Long Risk Reversal trade opportunity for COMMUNITY HEALTH SYSTEMS (CYH) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CYH was recently trading at $12.00 and has an implied volatility of 71.51% for this period. Based on an analysis of the options available for CYH expiring on 18-Jun-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $12.00-$15.48 at expiration. In this scenario, the average linear return for the trade would be 62.40%.
Big 7.62% Change: After closing the last trading session at $11.15, COMMUNITY HEALTH SYSTEMS opened today at $11.22 and has reached a high of $12.08.
Trade approach: A movement as big as 7.62% is a significantly bullish indicator, so this trade is designed to be profitable if CYH maintains its current direction and does not revert back to pricing on the bearish side of $12.00 on 18-Jun-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 COMMUNITY HEALTH SYSTEMS closes at or above $11.70 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 53.98% 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.