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Quantchabot has detected a promising Bull Call Spread trade opportunity for PINDUODUO INC. AMERICAN DEPOSITARY SHARES (PDD) for the 22-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

PDD was recently trading at $159.91 and has an implied volatility of 66.59% for this period. Based on an analysis of the options available for PDD expiring on 22-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $159.94-$202.25 at expiration. In this scenario, the average linear return for the trade would be 85.15%.

52 week high: PINDUODUO INC. AMERICAN DEPOSITARY SHARES recently reached a new 52-week high at $161.50. PDD had traded in the range $30.20-$155.61 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 PDD maintains its current direction and does not revert back to pricing on the bearish side of $159.91 on 22-Jan-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 PINDUODUO INC. AMERICAN DEPOSITARY SHARES closes at or above $159.80 on 22-Jan-2021. Based on our risk-neutral analysis, there is a 50.14% 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.