Quantchabot has detected a promising Bull Call Spread trade opportunity for CONFLUENT INC. CLASS A COMMON STOCK (CFLT) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CFLT was recently trading at $22.17 and has an implied volatility of 76.87% for this period. Based on an analysis of the options available for CFLT expiring on 20-Jan-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $22.31-$30.38 at expiration. In this scenario, the average linear return for the trade would be 15.92%.
Big 7.41% Change: After closing the last trading session at $20.64, CONFLUENT INC. CLASS A COMMON STOCK opened today at $20.80 and has reached a high of $22.36.
Trade approach: A movement as big as 7.41% is a significantly bullish indicator, so this trade is designed to be profitable if CFLT maintains its current direction and does not revert back to pricing on the bearish side of $22.17 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 CONFLUENT INC. CLASS A COMMON STOCK closes at or above $19.75 on 20-Jan-2023. Based on our risk-neutral analysis, there is a 65.41% 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.