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Quantchabot has detected a promising Bull Call Spread trade opportunity for PELOTON INTERACTIVE INC. CLASS A COMMON STOCK (PTON) for the 5-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PTON was recently trading at $166.84 and has an implied volatility of 76.39% for this period. Based on an analysis of the options available for PTON expiring on 5-Feb-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $166.85-$202.36 at expiration. In this scenario, the average linear return for the trade would be 85.91%.
52 week high: PELOTON INTERACTIVE INC. CLASS A COMMON STOCK recently reached a new 52-week high at $167.41. PTON had traded in the range $17.70-$167.37 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 PTON maintains its current direction and does not revert back to pricing on the bearish side of $166.84 on 5-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 PELOTON INTERACTIVE INC. CLASS A COMMON STOCK closes at or above $166.40 on 5-Feb-2021. Based on our risk-neutral analysis, there is a 50.56% 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.