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Quantchabot has detected a promising Bull Call Spread trade opportunity for AMERICAN EXPRESS (AXP) for the 19-Jun-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AXP was recently trading at $94.60 and has an implied volatility of 42.58% for this period. Based on an analysis of the options available for AXP expiring on 19-Jun-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $94.66-$111.03 at expiration. In this scenario, the average linear return for the trade would be 53.64%.
Big 7.27% Change: After closing the last trading session at $88.19, AMERICAN EXPRESS opened today at $91.75 and has reached a high of $94.85.
Trade approach: A movement as big as 7.27% is a significantly bullish indicator, so this trade is designed to be profitable if AXP maintains its current direction and does not revert back to pricing on the bearish side of $94.60 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 AMERICAN EXPRESS closes at or above $93.25 on 19-Jun-2020. Based on our risk-neutral analysis, there is a 53.74% 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.