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Quantchabot has detected a promising Bull Call Spread trade opportunity for ADT INC (ADT) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ADT was recently trading at $9.13 and has an implied volatility of 46.25% for this period. Based on an analysis of the options available for ADT expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $9.13-$9.91 at expiration. In this scenario, the average linear return for the trade would be 11.11%.
Big 7.92% Change: After closing the last trading session at $8.46, ADT INC opened today at $8.56 and has reached a high of $9.15.
Trade approach: A movement as big as 7.92% is a significantly bullish indicator, so this trade is designed to be profitable if ADT maintains its current direction and does not revert back to pricing on the bearish side of $9.13 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 ADT INC closes at or above $8.90 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 62.31% 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.