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Quantchabot has detected a promising Long Risk Reversal trade opportunity for SILVERGATE CAPITAL CORP (SI) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SI was recently trading at $102.52 and has an implied volatility of 94.83% for this period. Based on an analysis of the options available for SI expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $102.52-$135.36 at expiration. In this scenario, the average linear return for the trade would be 82.19%.
Big 12.36% Change: After closing the last trading session at $91.24, SILVERGATE CAPITAL CORP opened today at $91.99 and has reached a high of $103.25.
Trade approach: A movement as big as 12.36% is a significantly bullish indicator, so this trade is designed to be profitable if SI maintains its current direction and does not revert back to pricing on the bearish side of $102.52 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 SILVERGATE CAPITAL CORP closes at or above $99.50 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 54.29% 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.