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Quantchabot has detected a promising Long Risk Reversal trade opportunity for PATTERSON-UTI ENERGY (PTEN) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PTEN was recently trading at $7.30 and has an implied volatility of 72.79% for this period. Based on an analysis of the options available for PTEN expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $7.28-$9.44 at expiration. In this scenario, the average linear return for the trade would be 26.26%.
Big 7.99% Change: After closing the last trading session at $6.76, PATTERSON-UTI ENERGY opened today at $7.04 and has reached a high of $7.31.
Trade approach: A movement as big as 7.99% is a significantly bullish indicator, so this trade is designed to be profitable if PTEN maintains its current direction and does not revert back to pricing on the bearish side of $7.30 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 PATTERSON-UTI ENERGY closes at or above $6.95 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 57.12% 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.