Quantchabot has detected a promising Bull Call Spread trade opportunity for HOSTESS BRANDS INC CLASS A COMMON STOCK (TWNK) for the 20-Oct-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
TWNK was recently trading at $33.42 and has an implied volatility of 20.57% for this period. Based on an analysis of the options available for TWNK expiring on 20-Oct-2023, there is a 34.18% likelihood that the underlying will close within the analyzed range of $33.63-$35.99 at expiration. In this scenario, the average linear return for the trade would be 14.93%.
Big 18.91% Change: After closing the last trading session at $28.11, HOSTESS BRANDS INC CLASS A COMMON STOCK opened today at $33.43 and has reached a high of $33.54.
Trade approach: A movement as big as 18.91% is a significantly bullish indicator, so this trade is designed to be profitable if TWNK maintains its current direction and does not revert back to pricing on the bearish side of $33.42 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 HOSTESS BRANDS INC CLASS A COMMON STOCK closes at or above $33.45 on 20-Oct-2023. Based on our risk-neutral analysis, there is a 53.18% 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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