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Quantchabot has detected a promising Bull Call Spread trade opportunity for FACEBOOK (FB) for the 16-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FB was recently trading at $251.78 and has an implied volatility of 32.47% for this period. Based on an analysis of the options available for FB expiring on 16-Oct-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $251.87-$292.49 at expiration. In this scenario, the average linear return for the trade would be 77.10%.
52 week high: FACEBOOK recently reached a new 52-week high at $255.85. FB had traded in the range $137.10-$250.15 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 FB maintains its current direction and does not revert back to pricing on the bearish side of $251.78 on 16-Oct-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 FACEBOOK closes at or above $250.55 on 16-Oct-2020. Based on our risk-neutral analysis, there is a 51.40% 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.