Quantchabot has detected a promising Long Risk Reversal trade opportunity for CME GROUP (CME) for the 19-Jan-2024 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CME was recently trading at $208.46 and has an implied volatility of 27.73% for this period. Based on an analysis of the options available for CME expiring on 19-Jan-2024, there is a 39.24% likelihood that the underlying will close within the analyzed range of $208.46-$308.82 at expiration. In this scenario, the average linear return for the trade would be 94.08%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, CME GROUP was recently trending, indicating that breaking news and/or market activity has significantly impacted sentiment toward the stock. This movement can be interpretted as a sign of more near-term price movement for the underlying.
Trade approach: The recent sentiment change in CME on StockTwits appears to be significantly positive, indicating that the stock is likely to follow in that direction for investors trading on sentiment. As a result, a bullish strategy could prove effective if the sentiment ultimately turns out to drive trading.
Upside potential: Using this bullish strategy, the trade would be profitable if CME GROUP closed at or above $205.85 on 19-Jan-2024. Based on our analysis, there is a 56.53% 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.