Quantchabot has detected a promising Covered Call trade opportunity for BAOZUN INC. AMERICAN DEPOSITARY SHARES (BZUN) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
BZUN was recently trading at $4.09 and has an implied volatility of 80.05% for this period. Based on an analysis of the options available for BZUN expiring on 20-Oct-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $4.13-$5.61 at expiration. In this scenario, the average linear return for the trade would be 17.07%.
Big 10.98% Change: After closing the last trading session at $3.69, BAOZUN INC. AMERICAN DEPOSITARY SHARES opened today at $3.78 and has reached a high of $4.12.
Trade approach: A movement as big as 10.98% is a significantly bullish indicator, so this trade is designed to be profitable if BZUN maintains its current direction and does not revert back to pricing on the bearish side of $4.09 on 20-Oct-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 BAOZUN INC. AMERICAN DEPOSITARY SHARES closes at or above $4.00 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 54.14% 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.