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Quantchabot has detected a promising Bull Call Spread trade opportunity for MCDONALD’S (MCD) for the 30-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
MCD was recently trading at $232.50 and has an implied volatility of 19.08% for this period. Based on an analysis of the options available for MCD expiring on 30-Apr-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $232.52-$244.02 at expiration. In this scenario, the average linear return for the trade would be 59.33%.
52 week high: MCDONALD’S recently reached a new 52-week high at $232.81. MCD had traded in the range $167.85-$231.91 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 MCD maintains its current direction and does not revert back to pricing on the bearish side of $232.50 on 30-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 MCDONALD’S closes at or above $232.00 on 30-Apr-2021. Based on our risk-neutral analysis, there is a 51.84% 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.