Quantchabot has detected a promising Bull Call Spread trade opportunity for HUAZHU GROUP LTD ADS (HTHT) for the 17-Feb-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HTHT was recently trading at $49.51 and has an implied volatility of 45.58% for this period. Based on an analysis of the options available for HTHT expiring on 17-Feb-2023, there is a 34.24% likelihood that the underlying will close within the analyzed range of $49.67-$55.79 at expiration. In this scenario, the average linear return for the trade would be 14.14%.
52 week high: HUAZHU GROUP LTD ADS recently reached a new 52-week high at $49.76. HTHT had traded in the range $21.98-$49.06 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 HTHT maintains its current direction and does not revert back to pricing on the bearish side of $49.51 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 HUAZHU GROUP LTD ADS closes at or above $48.75 on 17-Feb-2023. Based on our risk-neutral analysis, there is a 56.37% 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.