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Quantchabot has detected a promising Long Risk Reversal trade opportunity for LANNETT COMPANY (LCI) for the 21-Aug-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

LCI was recently trading at $5.67 and has an implied volatility of 91.91% for this period. Based on an analysis of the options available for LCI expiring on 21-Aug-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $5.67-$7.57 at expiration. In this scenario, the average linear return for the trade would be 49.42%.

Big 10.25% Change: After closing the last trading session at $5.14, LANNETT COMPANY opened today at $6.23 and has reached a high of $6.43.

Trade approach: A movement as big as 10.25% is a significantly bullish indicator, so this trade is designed to be profitable if LCI maintains its current direction and does not revert back to pricing on the bearish side of $5.67 on 21-Aug-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 LANNETT COMPANY closes at or above $5.35 on 21-Aug-2020. Based on our risk-neutral analysis, there is a 57.88% 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.