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Quantchabot has detected a promising Bull Call Spread trade opportunity for NORDIC AMERICAN TANKERS (NAT) for the 15-May-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NAT was recently trading at $7.19 and has an implied volatility of 152.84% for this period. Based on an analysis of the options available for NAT expiring on 15-May-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $7.19-$10.13 at expiration. In this scenario, the average linear return for the trade would be 86.53%.
52 week high: NORDIC AMERICAN TANKERS recently reached a new 52-week high at $7.20. NAT had traded in the range $1.66-$5.88 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 NAT maintains its current direction and does not revert back to pricing on the bearish side of $7.19 on 15-May-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 NORDIC AMERICAN TANKERS closes at or above $7.00 on 15-May-2020. Based on our risk-neutral analysis, there is a 53.14% 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.