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Quantchabot has detected a promising Long Risk Reversal trade opportunity for FATE THERAPEUTICS INC. COMMON (FATE) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FATE was recently trading at $82.02 and has an implied volatility of 108.08% for this period. Based on an analysis of the options available for FATE expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $82.03-$112.60 at expiration. In this scenario, the average linear return for the trade would be 30.11%.
Big 7.44% Change: After closing the last trading session at $76.34, FATE THERAPEUTICS INC. COMMON opened today at $77.11 and has reached a high of $82.82.
Trade approach: A movement as big as 7.44% is a significantly bullish indicator, so this trade is designed to be profitable if FATE maintains its current direction and does not revert back to pricing on the bearish side of $82.02 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 FATE THERAPEUTICS INC. COMMON closes at or above $80.20 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 52.83% 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.