Big Gainer Alert: Trading today’s 16.5% move in STONECO LTD. CLASS A COMMON SHARES $STNE

Quantchabot has detected a promising Bull Call Spread trade opportunity for STONECO LTD. CLASS A COMMON SHARES (STNE) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

STNE was recently trading at $11.50 and has an implied volatility of 73.35% for this period. Based on an analysis of the options available for STNE expiring on 20-Jan-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $11.58-$15.73 at expiration. In this scenario, the average linear return for the trade would be 13.08%.

Big 16.50% Change: After closing the last trading session at $9.87, STONECO LTD. CLASS A COMMON SHARES opened today at $11.33 and has reached a high of $11.68.

Trade approach: A movement as big as 16.50% is a significantly bullish indicator, so this trade is designed to be profitable if STNE maintains its current direction and does not revert back to pricing on the bearish side of $11.50 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 STONECO LTD. CLASS A COMMON SHARES closes at or above $10.70 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 60.18% 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.