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Quantchabot has detected a promising Bull Call Spread trade opportunity for FORTUNE BRANDS HOME (FBHS) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
FBHS was recently trading at $98.25 and has an implied volatility of 24.04% for this period. Based on an analysis of the options available for FBHS expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $98.25-$102.09 at expiration. In this scenario, the average linear return for the trade would be 41.49%.
52 week high: FORTUNE BRANDS HOME recently reached a new 52-week high at $98.81. FBHS had traded in the range $37.00-$98.75 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 FBHS maintains its current direction and does not revert back to pricing on the bearish side of $98.25 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 FORTUNE BRANDS HOME closes at or above $98.20 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 50.56% 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.