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Quantchabot has detected a promising Covered Call trade opportunity for VERASTEM (VSTM) for the 18-Jun-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
VSTM was recently trading at $3.15 and has an implied volatility of 110.24% for this period. Based on an analysis of the options available for VSTM expiring on 18-Jun-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $3.16-$4.34 at expiration. In this scenario, the average linear return for the trade would be 17.72%.
52 week high: VERASTEM recently reached a new 52-week high at $3.21. VSTM had traded in the range $1.08-$3.20 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 VSTM maintains its current direction and does not revert back to pricing on the bearish side of $3.15 on 18-Jun-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 VERASTEM closes at or above $3.11 on 18-Jun-2021. Based on our risk-neutral analysis, there is a 51.81% 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.