52-Week High Alert: Trading today’s movement in ALLISON TRANSMISSION $ALSN

Quantchabot has detected a promising Bull Call Spread trade opportunity for ALLISON TRANSMISSION (ALSN) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ALSN was recently trading at $44.16 and has an implied volatility of 31.85% for this period. Based on an analysis of the options available for ALSN expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $44.45-$50.50 at expiration. In this scenario, the average linear return for the trade would be 10.45%.

52 week high: ALLISON TRANSMISSION recently reached a new 52-week high at $44.54. ALSN had traded in the range $32.63-$44.30 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 ALSN maintains its current direction and does not revert back to pricing on the bearish side of $44.16 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 ALLISON TRANSMISSION closes at or above $43.55 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 56.36% 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.