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Quantchabot has detected a promising Bull Call Spread trade opportunity for APPLIED MATERIALS (AMAT) for the 14-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AMAT was recently trading at $142.87 and has an implied volatility of 44.81% for this period. Based on an analysis of the options available for AMAT expiring on 14-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $142.88-$165.52 at expiration. In this scenario, the average linear return for the trade would be 47.12%.
52 week high: APPLIED MATERIALS recently reached a new 52-week high at $146.00. AMAT had traded in the range $41.58-$142.36 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 AMAT maintains its current direction and does not revert back to pricing on the bearish side of $142.87 on 14-May-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 APPLIED MATERIALS closes at or above $142.05 on 14-May-2021. Based on our risk-neutral analysis, there is a 51.59% 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.