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Big Gainer Alert: Trading today’s 17.5% move in SMITH & WESSON BRANDS INC

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Quantchabot has detected a promising Bull Call Spread trade opportunity for SMITH & WESSON BRANDS INC (SWBI) for the 20-Aug-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SWBI was recently trading at $23.40 and has an implied volatility of 48.14% for this period. Based on an analysis of the options available for SWBI expiring on 20-Aug-2021, there is a 34.13% likelihood that the underlying will close within the analyzed range of $23.40-$28.60 at expiration. In this scenario, the average linear return for the trade would be 61.49%.

Big 17.47% Change: After closing the last trading session at $19.92, SMITH & WESSON BRANDS INC opened today at $20.85 and has reached a high of $23.45.

Trade approach: A movement as big as 17.47% is a significantly bullish indicator, so this trade is designed to be profitable if SWBI maintains its current direction and does not revert back to pricing on the bearish side of $23.40 on 20-Aug-2021. 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 SMITH & WESSON BRANDS INC closes at or above $22.90 on 20-Aug-2021. Based on our risk-neutral analysis, there is a 54.32% 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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