Quantchabot has detected a promising Bull Call Spread trade opportunity for LIONS GATE ENTERTAINMENT CLASS A (LGF.A) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
LGF.A was recently trading at $7.54 and has an implied volatility of 74.18% for this period. Based on an analysis of the options available for LGF.A expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $7.59-$10.22 at expiration. In this scenario, the average linear return for the trade would be 11.31%.
Big 7.25% Change: After closing the last trading session at $7.03, LIONS GATE ENTERTAINMENT CLASS A opened today at $7.25 and has reached a high of $7.59.
Trade approach: A movement as big as 7.25% is a significantly bullish indicator, so this trade is designed to be profitable if LGF.A maintains its current direction and does not revert back to pricing on the bearish side of $7.54 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 LIONS GATE ENTERTAINMENT CLASS A closes at or above $7.35 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 54.29% 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.