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

CARA was recently trading at $18.72 and has an implied volatility of 96.31% for this period. Based on an analysis of the options available for CARA expiring on 21-Aug-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $18.73-$25.68 at expiration. In this scenario, the average linear return for the trade would be 59.20%.

Trending on StockTwits: StockTwits® is a financial communications platform for the financial and investing community. On their site, CARA THERAPEUTICS INC. COMMON 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 CARA 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 CARA THERAPEUTICS INC. COMMON closed at or above $18.70 on 21-Aug-2020. Based on our analysis, there is a 50.16% 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.