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Quantchabot has detected a promising Bull Call Spread trade opportunity for BAIDU (BIDU) for the 20-May-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BIDU was recently trading at $117.00 and has an implied volatility of 80.91% for this period. Based on an analysis of the options available for BIDU expiring on 20-May-2022, there is a 34.41% likelihood that the underlying will close within the analyzed range of $117.02-$131.57 at expiration. In this scenario, the average linear return for the trade would be 10.57%.
Big 8.45% Change: After closing the last trading session at $107.88, BAIDU opened today at $112.40 and has reached a high of $117.97.
Trade approach: A movement as big as 8.45% is a significantly bullish indicator, so this trade is designed to be profitable if BIDU maintains its current direction and does not revert back to pricing on the bearish side of $117.00 on 20-May-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 BAIDU closes at or above $113.20 on 20-May-2022. Based on our risk-neutral analysis, there is a 61.25% 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.