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Quantchabot has detected a promising Bull Call Spread trade opportunity for CREE (CREE) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CREE was recently trading at $78.39 and has an implied volatility of 45.53% for this period. Based on an analysis of the options available for CREE expiring on 15-Jan-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $78.41-$93.90 at expiration. In this scenario, the average linear return for the trade would be 57.64%.
Big 7.96% Change: After closing the last trading session at $72.61, CREE opened today at $75.06 and has reached a high of $78.50.
Trade approach: A movement as big as 7.96% is a significantly bullish indicator, so this trade is designed to be profitable if CREE maintains its current direction and does not revert back to pricing on the bearish side of $78.39 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 CREE closes at or above $78.10 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 50.87% 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.