Quantchabot has detected a promising Covered Call trade opportunity for CARA THERAPEUTICS INC. COMMON (CARA) for the 16-Jun-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CARA was recently trading at $4.49 and has an implied volatility of 62.25% for this period. Based on an analysis of the options available for CARA expiring on 16-Jun-2023, there is a 34.20% likelihood that the underlying will close within the analyzed range of $4.51-$5.42 at expiration. In this scenario, the average linear return for the trade would be 10.02%.
Big 8.19% Change: After closing the last trading session at $4.15, CARA THERAPEUTICS INC. COMMON opened today at $4.38 and has reached a high of $4.62.
Trade approach: A movement as big as 8.19% is a significantly bullish indicator, so this trade is designed to be profitable if CARA maintains its current direction and does not revert back to pricing on the bearish side of $4.49 on 16-Jun-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 CARA THERAPEUTICS INC. COMMON closes at or above $4.40 on 16-Jun-2023. Based on our risk-neutral analysis, there is a 55.50% 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.
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