Quantchabot has detected a promising Bull Call Spread trade opportunity for SILVERGATE CAPITAL CORP (SI) for the 30-Dec-2022 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
SI was recently trading at $26.30 and has an implied volatility of 138.94% for this period. Based on an analysis of the options available for SI expiring on 30-Dec-2022, there is a 34.20% likelihood that the underlying will close within the analyzed range of $26.41-$41.53 at expiration. In this scenario, the average linear return for the trade would be 12.68%.
Big 8.36% Change: After closing the last trading session at $24.27, SILVERGATE CAPITAL CORP opened today at $24.88 and has reached a high of $26.99.
Trade approach: A movement as big as 8.36% is a significantly bullish indicator, so this trade is designed to be profitable if SI maintains its current direction and does not revert back to pricing on the bearish side of $26.30 on 30-Dec-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 SILVERGATE CAPITAL CORP closes at or above $20.10 on 30-Dec-2022. Based on our risk-neutral analysis, there is a 72.74% 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.