Quantchabot has detected a promising Bull Call Spread trade opportunity for HONDA MOTOR (HMC) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
HMC was recently trading at $33.96 and has an implied volatility of 21.81% for this period. Based on an analysis of the options available for HMC expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $34.17-$36.72 at expiration. In this scenario, the average linear return for the trade would be 12.46%.
52 week high: HONDA MOTOR recently reached a new 52-week high at $33.97. HMC had traded in the range $21.43-$33.66 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 HMC maintains its current direction and does not revert back to pricing on the bearish side of $33.96 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 HONDA MOTOR closes at or above $33.75 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 56.84% 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.