Big Gainer Alert: Trading today’s 8.6% move in LI AUTO INC $LI

Quantchabot has detected a promising Bull Call Spread trade opportunity for LI AUTO INC (LI) for the 19-Aug-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

LI was recently trading at $39.98 and has an implied volatility of 74.84% for this period. Based on an analysis of the options available for LI expiring on 19-Aug-2022, there is a 34.17% likelihood that the underlying will close within the analyzed range of $40.04-$53.92 at expiration. In this scenario, the average linear return for the trade would be 10.09%.

Big 8.64% Change: After closing the last trading session at $36.80, LI AUTO INC opened today at $39.27 and has reached a high of $39.99.

Trade approach: A movement as big as 8.64% is a significantly bullish indicator, so this trade is designed to be profitable if LI maintains its current direction and does not revert back to pricing on the bearish side of $39.98 on 19-Aug-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 LI AUTO INC closes at or above $30.90 on 19-Aug-2022. Based on our risk-neutral analysis, there is a 80.85% 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.