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Quantchabot has detected a promising Bull Call Spread trade opportunity for KB HOME (KBH) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
KBH was recently trading at $25.26 and has an implied volatility of 65.78% for this period. Based on an analysis of the options available for KBH expiring on 19-Jun-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $25.19-$32.30 at expiration. In this scenario, the average linear return for the trade would be 74.13%.
Big 7.67% Change: After closing the last trading session at $23.46, KB HOME opened today at $24.70 and has reached a high of $25.29.
Trade approach: A movement as big as 7.67% is a significantly bullish indicator, so this trade is designed to be profitable if KBH maintains its current direction and does not revert back to pricing on the bearish side of $25.26 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 KB HOME closes at or above $25.12 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 50.42% 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.