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Quantchabot has detected a promising Bull Call Spread trade opportunity for TENCENT MUSIC ENTERTAINMENT GROUP (TME) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TME was recently trading at $21.23 and has an implied volatility of 42.89% for this period. Based on an analysis of the options available for TME expiring on 19-Feb-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $21.23-$24.35 at expiration. In this scenario, the average linear return for the trade would be 79.06%.
52 week high: TENCENT MUSIC ENTERTAINMENT GROUP recently reached a new 52-week high at $21.82. TME had traded in the range $9.22-$21.29 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 TME maintains its current direction and does not revert back to pricing on the bearish side of $21.23 on 19-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 TENCENT MUSIC ENTERTAINMENT GROUP closes at or above $21.05 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 52.51% 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.