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Quantchabot has detected a promising Bull Call Spread trade opportunity for SORRENTO THERAPEUTICS INC. C (SRNE) for the 21-May-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SRNE was recently trading at $7.16 and has an implied volatility of 75.64% for this period. Based on an analysis of the options available for SRNE expiring on 21-May-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $7.16-$7.70 at expiration. In this scenario, the average linear return for the trade would be 45.53%.
Big 7.67% Change: After closing the last trading session at $6.65, SORRENTO THERAPEUTICS INC. C opened today at $6.73 and has reached a high of $7.25.
Trade approach: A movement as big as 7.67% is a significantly bullish indicator, so this trade is designed to be profitable if SRNE maintains its current direction and does not revert back to pricing on the bearish side of $7.16 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 SORRENTO THERAPEUTICS INC. C closes at or above $7.10 on 21-May-2021. Based on our risk-neutral analysis, there is a 54.65% 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.