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Quantchabot has detected a promising Bull Call Spread trade opportunity for SCIENTIFIC GAMES (SGMS) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SGMS was recently trading at $38.42 and has an implied volatility of 71.03% for this period. Based on an analysis of the options available for SGMS expiring on 15-Jan-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $38.43-$50.91 at expiration. In this scenario, the average linear return for the trade would be 67.53%.
Big 7.56% Change: After closing the last trading session at $35.72, SCIENTIFIC GAMES opened today at $36.00 and has reached a high of $38.43.
Trade approach: A movement as big as 7.56% is a significantly bullish indicator, so this trade is designed to be profitable if SGMS maintains its current direction and does not revert back to pricing on the bearish side of $38.42 on 15-Jan-2021. 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 SCIENTIFIC GAMES closes at or above $37.90 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 51.96% 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.