Big Gainer Alert: Trading today’s 14.3% move in MERCADOLIBRE $MELI

Quantchabot has detected a promising Bull Call Spread trade opportunity for MERCADOLIBRE (MELI) for the 21-Oct-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

MELI was recently trading at $1,018.23 and has an implied volatility of 61.03% for this period. Based on an analysis of the options available for MELI expiring on 21-Oct-2022, there is a 34.16% likelihood that the underlying will close within the analyzed range of $1,023.13-$1,358.36 at expiration. In this scenario, the average linear return for the trade would be 10.40%.

Big 14.30% Change: After closing the last trading session at $890.87, MERCADOLIBRE opened today at $994.50 and has reached a high of $1,084.99.

Trade approach: A movement as big as 14.30% 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 $1,018.23 on 21-Oct-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 $871.59 on 21-Oct-2022. Based on our risk-neutral analysis, there is a 71.44% 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.