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Quantchabot has detected a promising Bull Call Spread trade opportunity for CLOUDFLARE INC (NET) for the 16-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
NET was recently trading at $52.20 and has an implied volatility of 73.36% for this period. Based on an analysis of the options available for NET expiring on 16-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $52.20-$56.58 at expiration. In this scenario, the average linear return for the trade would be 92.76%.
Big 12.62% Change: After closing the last trading session at $46.35, CLOUDFLARE INC opened today at $47.12 and has reached a high of $52.36.
Trade approach: A movement as big as 12.62% is a significantly bullish indicator, so this trade is designed to be profitable if NET maintains its current direction and does not revert back to pricing on the bearish side of $52.20 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 CLOUDFLARE INC closes at or above $52.05 on 16-Oct-2020. Based on our risk-neutral analysis, there is a 51.43% 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.