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Quantchabot has detected a promising Bull Call Spread trade opportunity for LEMONADE INC (LMND) for the 16-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LMND was recently trading at $57.77 and has an implied volatility of 73.95% for this period. Based on an analysis of the options available for LMND expiring on 16-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $57.77-$64.63 at expiration. In this scenario, the average linear return for the trade would be 81.98%.
Big 7.78% Change: After closing the last trading session at $53.60, LEMONADE INC opened today at $54.70 and has reached a high of $57.77.
Trade approach: A movement as big as 7.78% is a significantly bullish indicator, so this trade is designed to be profitable if LMND maintains its current direction and does not revert back to pricing on the bearish side of $57.77 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 LEMONADE INC closes at or above $57.50 on 16-Oct-2020. Based on our risk-neutral analysis, there is a 51.68% 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.