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Quantchabot has detected a promising Bull Call Spread trade opportunity for BANK OF AMERICA CORP (BAC) for the 10-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BAC was recently trading at $35.52 and has an implied volatility of 17.79% for this period. Based on an analysis of the options available for BAC expiring on 10-Jan-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $35.54-$36.67 at expiration. In this scenario, the average linear return for the trade would be 51.52%.
52 week high: BANK OF AMERICA CORP recently reached a new 52-week high at $35.65. BAC had traded in the range $23.39-$35.56 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 BAC maintains its current direction and does not revert back to pricing on the bearish side of $35.52 on 10-Jan-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 BANK OF AMERICA CORP closes at or above $35.33 on 10-Jan-2020. Based on our risk-neutral analysis, there is a 57.32% 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.