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Quantchabot has detected a promising Bull Call Spread trade opportunity for ALLEGRO MICROSYSTEMS INC. COMMON STOCK (ALGM) for the 15-Oct-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ALGM was recently trading at $33.48 and has an implied volatility of 39.38% for this period. Based on an analysis of the options available for ALGM expiring on 15-Oct-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $33.48-$37.65 at expiration. In this scenario, the average linear return for the trade would be 12.32%.
Big 8.98% Change: After closing the last trading session at $30.72, ALLEGRO MICROSYSTEMS INC. COMMON STOCK opened today at $31.21 and has reached a high of $33.75.
Trade approach: A movement as big as 8.98% is a significantly bullish indicator, so this trade is designed to be profitable if ALGM maintains its current direction and does not revert back to pricing on the bearish side of $33.48 on 15-Oct-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 ALLEGRO MICROSYSTEMS INC. COMMON STOCK closes at or above $33.05 on 15-Oct-2021. Based on our risk-neutral analysis, there is a 54.41% 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.