Quantchabot has detected a promising Bull Call Spread trade opportunity for TRAVELERS COMPANIES (TRV) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TRV was recently trading at $187.50 and has an implied volatility of 21.76% for this period. Based on an analysis of the options available for TRV expiring on 20-Jan-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $187.81-$205.10 at expiration. In this scenario, the average linear return for the trade would be 10.04%.
52 week high: TRAVELERS COMPANIES recently reached a new 52-week high at $188.46. TRV had traded in the range $145.40-$187.98 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 TRV maintains its current direction and does not revert back to pricing on the bearish side of $187.50 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 TRAVELERS COMPANIES closes at or above $186.10 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 54.14% 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.