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Quantchabot has detected a promising Bull Call Spread trade opportunity for SPOTIFY TECHNOLOGY SA (SPOT) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SPOT was recently trading at $384.59 and has an implied volatility of 52.83% for this period. Based on an analysis of the options available for SPOT expiring on 16-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $384.65-$470.66 at expiration. In this scenario, the average linear return for the trade would be 68.86%.
52 week high: SPOTIFY TECHNOLOGY SA recently reached a new 52-week high at $386.94. SPOT had traded in the range $109.18-$370.95 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 SPOT maintains its current direction and does not revert back to pricing on the bearish side of $384.59 on 16-Apr-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 SPOTIFY TECHNOLOGY SA closes at or above $382.60 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 51.06% 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.