Quantchabot has detected a promising Bull Call Spread trade opportunity for PINDUODUO INC. ADS (PDD) for the 18-Nov-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PDD was recently trading at $70.77 and has an implied volatility of 82.78% for this period. Based on an analysis of the options available for PDD expiring on 18-Nov-2022, there is a 34.83% likelihood that the underlying will close within the analyzed range of $70.80-$77.01 at expiration. In this scenario, the average linear return for the trade would be 10.00%.
Big 8.23% Change: After closing the last trading session at $65.39, PINDUODUO INC. ADS opened today at $69.94 and has reached a high of $72.41.
Trade approach: A movement as big as 8.23% is a significantly bullish indicator, so this trade is designed to be profitable if PDD maintains its current direction and does not revert back to pricing on the bearish side of $70.77 on 18-Nov-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 PINDUODUO INC. ADS closes at or above $70.65 on 18-Nov-2022. Based on our risk-neutral analysis, there is a 51.00% 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.