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Quantchabot has detected a promising Bull Call Spread trade opportunity for EHANG HOLDINGS LTD. ADR OVERVIEW (EH) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
EH was recently trading at $23.76 and has an implied volatility of 123.56% for this period. Based on an analysis of the options available for EH expiring on 21-May-2021, there is a 34.15% likelihood that the underlying will close within the analyzed range of $23.76-$26.74 at expiration. In this scenario, the average linear return for the trade would be 41.91%.
Big 11.18% Change: After closing the last trading session at $21.37, EHANG HOLDINGS LTD. ADR OVERVIEW opened today at $20.92 and has reached a high of $24.10.
Trade approach: A movement as big as 11.18% is a significantly bullish indicator, so this trade is designed to be profitable if EH maintains its current direction and does not revert back to pricing on the bearish side of $23.76 on 21-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 EHANG HOLDINGS LTD. ADR OVERVIEW closes at or above $23.30 on 21-May-2021. Based on our risk-neutral analysis, there is a 56.59% 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.