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Quantchabot has detected a promising Long Risk Reversal trade opportunity for WAYFAIR INC (W) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
W was recently trading at $279.63 and has an implied volatility of 56.60% for this period. Based on an analysis of the options available for W expiring on 18-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $279.69-$368.34 at expiration. In this scenario, the average linear return for the trade would be 69.66%.
Big 7.63% Change: After closing the last trading session at $259.80, WAYFAIR INC opened today at $264.62 and has reached a high of $280.36.
Trade approach: A movement as big as 7.63% is a significantly bullish indicator, so this trade is designed to be profitable if W maintains its current direction and does not revert back to pricing on the bearish side of $279.63 on 18-Feb-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 WAYFAIR INC closes at or above $273.40 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 53.29% 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.