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Quantchabot has detected a promising Long Risk Reversal trade opportunity for PETROLEO BRASILEIRO SA (PBR) for the 1-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PBR was recently trading at $6.59 and has an implied volatility of 99.07% for this period. Based on an analysis of the options available for PBR expiring on 1-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $6.59-$8.52 at expiration. In this scenario, the average linear return for the trade would be 53.42%.

Big 7.33% Change: After closing the last trading session at $6.14, PETROLEO BRASILEIRO SA opened today at $6.66 and has reached a high of $6.70.

Trade approach: A movement as big as 7.33% is a significantly bullish indicator, so this trade is designed to be profitable if PBR maintains its current direction and does not revert back to pricing on the bearish side of $6.59 on 1-May-2020. 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 PETROLEO BRASILEIRO SA closes at or above $6.58 on 1-May-2020. Based on our risk-neutral analysis, there is a 50.34% 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.