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Quantchabot has detected a promising Bull Call Spread trade opportunity for TATA MOTORS (TTM) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TTM was recently trading at $15.41 and has an implied volatility of 65.78% for this period. Based on an analysis of the options available for TTM expiring on 15-Jan-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $15.42-$16.56 at expiration. In this scenario, the average linear return for the trade would be 35.01%.
Big 12.77% Change: After closing the last trading session at $13.67, TATA MOTORS opened today at $15.02 and has reached a high of $15.53.
Trade approach: A movement as big as 12.77% is a significantly bullish indicator, so this trade is designed to be profitable if TTM maintains its current direction and does not revert back to pricing on the bearish side of $15.41 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 TATA MOTORS closes at or above $15.35 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 52.36% 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.