Quantchabot has detected a promising Bull Call Spread trade opportunity for ARDELYX INC. COMMON STOCK (ARDX) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ARDX was recently trading at $1.59 and has an implied volatility of 198.82% for this period. Based on an analysis of the options available for ARDX expiring on 20-Jan-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $1.61-$3.71 at expiration. In this scenario, the average linear return for the trade would be 17.65%.
52 week high: ARDELYX INC. COMMON STOCK recently reached a new 52-week high at $1.98. ARDX had traded in the range $0.49-$1.92 over the past year.
Trade approach: Reaching a new 52-week high is a bullish indicator, so this trade is designed to be profitable if ARDX maintains its current direction and does not revert back to pricing on the bearish side of $1.59 on 20-Jan-2023. 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 ARDELYX INC. COMMON STOCK closes at or above $1.35 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 58.23% 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.