Big Gainer Alert: Trading today’s 8.0% move in MERCADOLIBRE $MELI

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Quantchabot has detected a promising Bull Call Spread trade opportunity for MERCADOLIBRE (MELI) for the 24-Jun-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

MELI was recently trading at $832.70 and has an implied volatility of 84.53% for this period. Based on an analysis of the options available for MELI expiring on 24-Jun-2022, there is a 34.18% likelihood that the underlying will close within the analyzed range of $833.23-$1,123.84 at expiration. In this scenario, the average linear return for the trade would be 21.26%.

Big 8.00% Change: After closing the last trading session at $770.99, MERCADOLIBRE opened today at $808.08 and has reached a high of $836.13.

Trade approach: A movement as big as 8.00% is a significantly bullish indicator, so this trade is designed to be profitable if MELI maintains its current direction and does not revert back to pricing on the bearish side of $832.70 on 24-Jun-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 MERCADOLIBRE closes at or above $723.70 on 24-Jun-2022. Based on our risk-neutral analysis, there is a 68.15% 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.