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Quantchabot has detected a promising Bull Call Spread trade opportunity for ROKU INC. CLASS A COMMON STOCK (ROKU) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ROKU was recently trading at $257.56 and has an implied volatility of 59.44% for this period. Based on an analysis of the options available for ROKU expiring on 15-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $257.62-$325.40 at expiration. In this scenario, the average linear return for the trade would be 92.33%.
52 week high: ROKU INC. CLASS A COMMON STOCK recently reached a new 52-week high at $261.99. ROKU had traded in the range $58.22-$255.66 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 ROKU maintains its current direction and does not revert back to pricing on the bearish side of $257.56 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 ROKU INC. CLASS A COMMON STOCK closes at or above $257.20 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 50.28% 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.