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Quantchabot has detected a promising Bull Call Spread trade opportunity for GAMESTOP (GME) for the 20-Nov-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
GME was recently trading at $13.38 and has an implied volatility of 89.76% for this period. Based on an analysis of the options available for GME expiring on 20-Nov-2020, there is a 34.26% likelihood that the underlying will close within the analyzed range of $13.38-$13.74 at expiration. In this scenario, the average linear return for the trade would be 58.43%.
Big 7.38% Change: After closing the last trading session at $12.46, GAMESTOP opened today at $12.55 and has reached a high of $13.46.
Trade approach: A movement as big as 7.38% is a significantly bullish indicator, so this trade is designed to be profitable if GME maintains its current direction and does not revert back to pricing on the bearish side of $13.38 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 GAMESTOP closes at or above $13.30 on 20-Nov-2020. Based on our risk-neutral analysis, there is a 58.96% 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.