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Big Gainer Alert: Trading today’s 7.9% move in GAMESTOP

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Quantchabot has detected a promising Long Risk Reversal trade opportunity for GAMESTOP (GME) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

GME was recently trading at $166.93 and has an implied volatility of 165.83% for this period. Based on an analysis of the options available for GME expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $166.94-$273.60 at expiration. In this scenario, the average linear return for the trade would be 131.60%.

Big 7.91% Change: After closing the last trading session at $154.69, GAMESTOP opened today at $171.80 and has reached a high of $172.00.

Trade approach: A movement as big as 7.91% is a significantly bullish indicator, so this trade is designed to be profitable if GME maintains its current direction and does not revert back to pricing on the bearish side of $166.93 on 21-May-2021. 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 GAMESTOP closes at or above $159.10 on 21-May-2021. Based on our risk-neutral analysis, there is a 53.88% 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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