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Quantchabot has detected a promising Bull Call Spread trade opportunity for VIPSHOP HOLDINGS (VIPS) for the 20-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VIPS was recently trading at $20.05 and has an implied volatility of 74.79% for this period. Based on an analysis of the options available for VIPS expiring on 20-Nov-2020, there is a 34.13% likelihood that the underlying will close within the analyzed range of $20.05-$25.31 at expiration. In this scenario, the average linear return for the trade would be 88.35%.
Big 13.57% Change: After closing the last trading session at $17.65, VIPSHOP HOLDINGS opened today at $18.28 and has reached a high of $20.38.
Trade approach: A movement as big as 13.57% is a significantly bullish indicator, so this trade is designed to be profitable if VIPS maintains its current direction and does not revert back to pricing on the bearish side of $20.05 on 20-Nov-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 VIPSHOP HOLDINGS closes at or above $20.00 on 20-Nov-2020. Based on our risk-neutral analysis, there is a 50.41% 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.