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Quantchabot has detected a promising Bull Call Spread trade opportunity for RH (RH) for the 27-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RH was recently trading at $439.75 and has an implied volatility of 43.22% for this period. Based on an analysis of the options available for RH expiring on 27-Nov-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $439.76-$467.46 at expiration. In this scenario, the average linear return for the trade would be 58.04%.
52 week high: RH recently reached a new 52-week high at $442.74. RH had traded in the range $73.14-$439.76 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if RH maintains its current direction and does not revert back to pricing on the bearish side of $439.75 on 27-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 RH closes at or above $439.10 on 27-Nov-2020. Based on our risk-neutral analysis, there is a 50.99% 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.