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Quantchabot has detected a promising Bull Call Spread trade opportunity for ZTO EXPRESS CAYMAN (ZTO) for the 18-Feb-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ZTO was recently trading at $31.84 and has an implied volatility of 40.04% for this period. Based on an analysis of the options available for ZTO expiring on 18-Feb-2022, there is a 34.14% likelihood that the underlying will close within the analyzed range of $31.84-$36.25 at expiration. In this scenario, the average linear return for the trade would be 41.02%.
Big 8.84% Change: After closing the last trading session at $29.25, ZTO EXPRESS CAYMAN opened today at $29.75 and has reached a high of $31.88.
Trade approach: A movement as big as 8.84% is a significantly bullish indicator, so this trade is designed to be profitable if ZTO maintains its current direction and does not revert back to pricing on the bearish side of $31.84 on 18-Feb-2022. 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 ZTO EXPRESS CAYMAN closes at or above $31.80 on 18-Feb-2022. Based on our risk-neutral analysis, there is a 50.35% 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.