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Quantchabot has detected a promising Bull Call Spread trade opportunity for QUEST DIAGNOSTICS (DGX) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DGX was recently trading at $117.74 and has an implied volatility of 42.27% for this period. Based on an analysis of the options available for DGX expiring on 19-Jun-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $117.81-$138.28 at expiration. In this scenario, the average linear return for the trade would be 49.77%.
52 week high: QUEST DIAGNOSTICS recently reached a new 52-week high at $125.00. DGX had traded in the range $73.02-$118.58 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 DGX maintains its current direction and does not revert back to pricing on the bearish side of $117.74 on 19-Jun-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 QUEST DIAGNOSTICS closes at or above $117.30 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 51.09% 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.