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Quantchabot has detected a promising Bull Call Spread trade opportunity for DISCOVERY COMMUNICATIONS (DISCA) for the 19-Feb-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
DISCA was recently trading at $49.88 and has an implied volatility of 55.66% for this period. Based on an analysis of the options available for DISCA expiring on 19-Feb-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $49.88-$51.56 at expiration. In this scenario, the average linear return for the trade would be 38.57%.
52 week high: DISCOVERY COMMUNICATIONS recently reached a new 52-week high at $50.69. DISCA had traded in the range $17.12-$49.94 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 DISCA maintains its current direction and does not revert back to pricing on the bearish side of $49.88 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 DISCOVERY COMMUNICATIONS closes at or above $49.30 on 19-Feb-2021. Based on our risk-neutral analysis, there is a 63.83% 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.