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Quantchabot has detected a promising Bull Call Spread trade opportunity for BHP GROUP LTD (BHP) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BHP was recently trading at $75.78 and has an implied volatility of 35.25% for this period. Based on an analysis of the options available for BHP expiring on 19-Feb-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $75.78-$78.37 at expiration. In this scenario, the average linear return for the trade would be 19.05%.
Big 7.67% Change: After closing the last trading session at $70.38, BHP GROUP LTD opened today at $74.20 and has reached a high of $76.12.
Trade approach: A movement as big as 7.67% is a significantly bullish indicator, so this trade is designed to be profitable if BHP maintains its current direction and does not revert back to pricing on the bearish side of $75.78 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 BHP GROUP LTD closes at or above $75.75 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 50.48% 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.