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Quantchabot has detected a promising Long Risk Reversal trade opportunity for LORDSTOWN MOTORS CORP (RIDE) for the 30-Jul-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RIDE was recently trading at $11.39 and has an implied volatility of 160.45% for this period. Based on an analysis of the options available for RIDE expiring on 30-Jul-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $11.39-$20.54 at expiration. In this scenario, the average linear return for the trade would be 113.03%.
Big 7.45% Change: After closing the last trading session at $10.60, LORDSTOWN MOTORS CORP opened today at $10.61 and has reached a high of $11.60.
Trade approach: A movement as big as 7.45% is a significantly bullish indicator, so this trade is designed to be profitable if RIDE maintains its current direction and does not revert back to pricing on the bearish side of $11.39 on 30-Jul-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 LORDSTOWN MOTORS CORP closes at or above $11.10 on 30-Jul-2021. Based on our risk-neutral analysis, there is a 51.75% 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.