Quantchabot has detected a promising Bull Call Spread trade opportunity for ZAI LAB LIMITED ADS (ZLAB) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
ZLAB was recently trading at $28.66 and has an implied volatility of 65.10% for this period. Based on an analysis of the options available for ZLAB expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $28.86-$36.34 at expiration. In this scenario, the average linear return for the trade would be 17.94%.
Big 9.81% Change: After closing the last trading session at $26.10, ZAI LAB LIMITED ADS opened today at $29.17 and has reached a high of $29.64.
Trade approach: A movement as big as 9.81% is a significantly bullish indicator, so this trade is designed to be profitable if ZLAB maintains its current direction and does not revert back to pricing on the bearish side of $28.66 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 ZAI LAB LIMITED ADS closes at or above $28.00 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 55.25% 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.