Quantchabot has detected a promising Bull Call Spread trade opportunity for CARVANA CO (CVNA) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
CVNA was recently trading at $44.20 and has an implied volatility of 106.98% for this period. Based on an analysis of the options available for CVNA expiring on 20-Oct-2023, there is a 34.17% likelihood that the underlying will close within the analyzed range of $44.57-$67.18 at expiration. In this scenario, the average linear return for the trade would be 10.50%.
Big 7.28% Change: After closing the last trading session at $41.20, CARVANA CO opened today at $41.79 and has reached a high of $45.38.
Trade approach: A movement as big as 7.28% is a significantly bullish indicator, so this trade is designed to be profitable if CVNA maintains its current direction and does not revert back to pricing on the bearish side of $44.20 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 CARVANA CO closes at or above $29.05 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 85.20% 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.