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Quantchabot has detected a promising Bull Call Spread trade opportunity for BRISTOL-MYERS SQUIBB (BMY) for the 31-Jan-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BMY was recently trading at $65.83 and has an implied volatility of 23.42% for this period. Based on an analysis of the options available for BMY expiring on 31-Jan-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $65.90-$69.86 at expiration. In this scenario, the average linear return for the trade would be 69.10%.
52 week high: BRISTOL-MYERS SQUIBB recently reached a new 52-week high at $65.97. BMY had traded in the range $42.48-$64.75 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 BMY maintains its current direction and does not revert back to pricing on the bearish side of $65.83 on 31-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 BRISTOL-MYERS SQUIBB closes at or above $65.59 on 31-Jan-2020. Based on our risk-neutral analysis, there is a 53.17% 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.