Quantchabot has detected a promising Bull Call Spread trade opportunity for CARVANA CO (CVNA) for the 17-Feb-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVNA was recently trading at $7.55 and has an implied volatility of 160.78% for this period. Based on an analysis of the options available for CVNA expiring on 17-Feb-2023, there is a 34.16% likelihood that the underlying will close within the analyzed range of $7.63-$16.71 at expiration. In this scenario, the average linear return for the trade would be 25.00%.
Big 11.10% Change: After closing the last trading session at $6.80, CARVANA CO opened today at $7.32 and has reached a high of $7.59.
Trade approach: A movement as big as 11.10% is a significantly bullish indicator, so this trade is designed to be profitable if CVNA maintains its current direction and does not revert back to pricing on the bearish side of $7.55 on 17-Feb-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 CARVANA CO closes at or above $4.50 on 17-Feb-2023. Based on our risk-neutral analysis, there is a 74.98% 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.