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Quantchabot has detected a promising Long Risk Reversal trade opportunity for GUESS (GES) for the 18-Mar-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GES was recently trading at $24.30 and has an implied volatility of 55.40% for this period. Based on an analysis of the options available for GES expiring on 18-Mar-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $23.86-$32.53 at expiration. In this scenario, the average linear return for the trade would be 63.14%.
Big 14.06% Change: After closing the last trading session at $21.30, GUESS opened today at $23.30 and has reached a high of $24.73.
Trade approach: A movement as big as 14.06% is a significantly bullish indicator, so this trade is designed to be profitable if GES maintains its current direction and does not revert back to pricing on the bearish side of $24.30 on 18-Mar-2022. 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 GUESS closes at or above $23.70 on 18-Mar-2022. Based on our risk-neutral analysis, there is a 50.86% 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.