Quantchabot has detected a promising Bull Call Spread trade opportunity for REATA PHARMACEUTICALS INC. CLASS A (RETA) for the 17-Feb-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
RETA was recently trading at $44.80 and has an implied volatility of 129.33% for this period. Based on an analysis of the options available for RETA expiring on 17-Feb-2023, there is a 34.24% likelihood that the underlying will close within the analyzed range of $44.94-$62.50 at expiration. In this scenario, the average linear return for the trade would be 12.08%.
52 week high: REATA PHARMACEUTICALS INC. CLASS A recently reached a new 52-week high at $45.21. RETA had traded in the range $18.47-$43.90 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 RETA maintains its current direction and does not revert back to pricing on the bearish side of $44.80 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 REATA PHARMACEUTICALS INC. CLASS A closes at or above $44.00 on 17-Feb-2023. Based on our risk-neutral analysis, there is a 52.57% 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.