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Quantchabot has detected a promising Bull Call Spread trade opportunity for DR. REDDY LABS (RDY) for the 16-Oct-2020 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

RDY was recently trading at $62.61 and has an implied volatility of 28.63% for this period. Based on an analysis of the options available for RDY expiring on 16-Oct-2020, there is a 34.14% likelihood that the underlying will close within the analyzed range of $62.62-$68.00 at expiration. In this scenario, the average linear return for the trade would be 31.03%.

52 week high: DR. REDDY LABS recently reached a new 52-week high at $63.80. RDY had traded in the range $33.33-$62.60 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 RDY maintains its current direction and does not revert back to pricing on the bearish side of $62.61 on 16-Oct-2020. 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 DR. REDDY LABS closes at or above $62.15 on 16-Oct-2020. Based on our risk-neutral analysis, there is a 53.62% 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.