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Quantchabot has detected a promising Bull Call Spread trade opportunity for EMBRAER (ERJ) for the 16-Apr-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ERJ was recently trading at $11.34 and has an implied volatility of 77.63% for this period. Based on an analysis of the options available for ERJ expiring on 16-Apr-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $11.34-$12.75 at expiration. In this scenario, the average linear return for the trade would be 17.21%.
Big 7.90% Change: After closing the last trading session at $10.51, EMBRAER opened today at $10.80 and has reached a high of $11.35.
Trade approach: A movement as big as 7.90% is a significantly bullish indicator, so this trade is designed to be profitable if ERJ maintains its current direction and does not revert back to pricing on the bearish side of $11.34 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 EMBRAER closes at or above $11.30 on 16-Apr-2021. Based on our risk-neutral analysis, there is a 51.21% 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.