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Quantchabot has detected a promising Bull Call Spread trade opportunity for 613179 (LI) for the 12-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LI was recently trading at $35.42 and has an implied volatility of 92.75% for this period. Based on an analysis of the options available for LI expiring on 12-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $35.42-$46.48 at expiration. In this scenario, the average linear return for the trade would be 131.77%.
Big 8.02% Change: After closing the last trading session at $32.79, 613179 opened today at $32.38 and has reached a high of $35.48.
Trade approach: A movement as big as 8.02% is a significantly bullish indicator, so this trade is designed to be profitable if LI maintains its current direction and does not revert back to pricing on the bearish side of $35.42 on 12-Feb-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 613179 closes at or above $35.41 on 12-Feb-2021. Based on our risk-neutral analysis, there is a 50.06% 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.