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Quantchabot has detected a promising Bull Call Spread trade opportunity for BROADCOM LIMITED ORDINARY SHARES (AVGO) for the 19-Nov-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
AVGO was recently trading at $507.06 and has an implied volatility of 24.37% for this period. Based on an analysis of the options available for AVGO expiring on 19-Nov-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $503.54-$558.22 at expiration. In this scenario, the average linear return for the trade would be 63.84%.
52 week high: BROADCOM LIMITED ORDINARY SHARES recently reached a new 52-week high at $507.90. AVGO had traded in the range $343.48-$507.85 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 AVGO maintains its current direction and does not revert back to pricing on the bearish side of $507.06 on 19-Nov-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 BROADCOM LIMITED ORDINARY SHARES closes at or above $501.90 on 19-Nov-2021. Based on our risk-neutral analysis, there is a 51.26% 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.