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Quantchabot has detected a promising Bull Call Spread trade opportunity for UNITED MICROELECTRONICS (UMC) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
UMC was recently trading at $9.54 and has an implied volatility of 80.61% for this period. Based on an analysis of the options available for UMC expiring on 15-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $9.55-$10.01 at expiration. In this scenario, the average linear return for the trade would be 12.70%.
Big 7.37% Change: After closing the last trading session at $8.89, UNITED MICROELECTRONICS opened today at $9.02 and has reached a high of $9.64.
Trade approach: A movement as big as 7.37% is a significantly bullish indicator, so this trade is designed to be profitable if UMC maintains its current direction and does not revert back to pricing on the bearish side of $9.54 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 UNITED MICROELECTRONICS closes at or above $9.50 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 53.98% 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.