52-Week High Alert: Trading today’s movement in SHOPIFY INC $SHOP

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Quantchabot has detected a promising Bull Call Spread trade opportunity for SHOPIFY INC (SHOP) for the 7-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SHOP was recently trading at $414.61 and has an implied volatility of 42.98% for this period. Based on an analysis of the options available for SHOP expiring on 7-Feb-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $415.50-$480.54 at expiration. In this scenario, the average linear return for the trade would be 54.99%.

52 week high: SHOPIFY INC recently reached a new 52-week high at $415.67. SHOP had traded in the range $121.38-$409.61 over the past year.

Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if SHOP maintains its current direction and does not revert back to pricing on the bearish side of $414.61 on 7-Feb-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 SHOPIFY INC closes at or above $414.90 on 7-Feb-2020. Based on our risk-neutral analysis, there is a 50.40% 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.