Quantchabot has detected a promising Bull Call Spread trade opportunity for EVOLENT HEALTH INC (EVH) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
EVH was recently trading at $27.50 and has an implied volatility of 55.25% for this period. Based on an analysis of the options available for EVH expiring on 20-Jan-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $27.69-$34.89 at expiration. In this scenario, the average linear return for the trade would be 15.04%.
Big 15.26% Change: After closing the last trading session at $23.86, EVOLENT HEALTH INC opened today at $25.37 and has reached a high of $27.70.
Trade approach: A movement as big as 15.26% is a significantly bullish indicator, so this trade is designed to be profitable if EVH maintains its current direction and does not revert back to pricing on the bearish side of $27.50 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 EVOLENT HEALTH INC closes at or above $27.30 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 52.47% 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.