Quantchabot has detected a promising Long Risk Reversal trade opportunity for HERCULES CAPITAL INC (HTGC) for the 15-Dec-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HTGC was recently trading at $12.29 and has an implied volatility of 40.85% for this period. Based on an analysis of the options available for HTGC expiring on 15-Dec-2023, there is a 38.65% likelihood that the underlying will close within the analyzed range of $12.29-$18.28 at expiration. In this scenario, the average linear return for the trade would be 97.97%.
Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, HERCULES CAPITAL INC 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 HTGC on StockTwits appears to be moderately 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 HERCULES CAPITAL INC closed at or above $11.60 on 15-Dec-2023. Based on our analysis, there is a 60.85% 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.
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