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Quantchabot has detected a promising Bull Call Spread trade opportunity for BAIDU (BIDU) for the 23-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BIDU was recently trading at $136.40 and has an implied volatility of 34.94% for this period. Based on an analysis of the options available for BIDU expiring on 23-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $136.41-$144.26 at expiration. In this scenario, the average linear return for the trade would be 92.84%.
Big 7.36% Change: After closing the last trading session at $127.05, BAIDU opened today at $127.80 and has reached a high of $136.80.
Trade approach: A movement as big as 7.36% is a significantly bullish indicator, so this trade is designed to be profitable if BIDU maintains its current direction and does not revert back to pricing on the bearish side of $136.40 on 23-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 BAIDU closes at or above $135.97 on 23-Oct-2020. Based on our risk-neutral analysis, there is a 52.28% 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.