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Quantchabot has detected a promising Bull Call Spread trade opportunity for NIO INC (NIO) for the 21-Feb-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NIO was recently trading at $3.21 and has an implied volatility of 78.97% for this period. Based on an analysis of the options available for NIO expiring on 21-Feb-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $3.21-$4.94 at expiration. In this scenario, the average linear return for the trade would be 132.29%.
Big 32.44% Change: After closing the last trading session at $2.42, NIO INC opened today at $2.92 and has reached a high of $3.28.
Trade approach: A movement as big as 32.44% is a significantly bullish indicator, so this trade is designed to be profitable if NIO maintains its current direction and does not revert back to pricing on the bearish side of $3.21 on 21-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 NIO INC closes at or above $3.20 on 21-Feb-2020. Based on our risk-neutral analysis, there is a 50.39% 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.