AR Bullish Call Spread is Undervalued at $2.40

By Dmitry Pargamanik

How this AR Bull Call Spread Works

The bottom of the AR trade card shows us that we would buy one call and sell another with the same 16-Sep-22 expiration (this is a bull call spread as indicated on the top of the card).

Reasons to Like This Trade

• You can buy this spread for $2.40 when theoretically it’s worth $3.01. Simply put, the market is implying a theoretical edge of 25.3%.
• Your maximum gain is $2.60, which means you can make an astounding 108.3% return on your investment in 18 trading days! (That's if the stock closes at 46.5 or above. $2.60 / $2.40 = 108.3%) At the time of this alert, the stock was trading at 43.27.
• The stock only needs to close at, or above, 46.50 after 18 trading days for you to realize this maximum return. That’s only a 7.5% gain! If you look at AR historically drift, you will find that 61% of the time the stock drifted higher than 7.5% in 18 trading days. Based on historical stock behavior (historical stock drift) the spread has a 61% chance of success.
• 7 out of 7 indicators are pointing to a bullish sentiment in the stock, which is enough to believe there is a decent chance the stock price could hit its mark of 46.50. Look, nobody knows for sure if the stock is going to go up or down, but, if you had to handicap the stock price, these metrics are indicating that AR is really riding the momentum of bullish signals.

  Metric	Signal	Bull or Bear
  Relative Performance 1-yr	Outperform	Bullish
  Relative Performance 3-Mon	Outperform	Bullish
  Relative Performance 1-Wk	Outperform	Bullish
  Seasonality	Strong	Bullish
  Technical	Uptrend	Bullish
  Historical Price Action	61% Uptrend	Bullish
  Option Order Flow Sentiment	Positive Net Option Delta	Bullish

  
  

Conclusion

This trade in AR looks like a good opportunity because:

1. 7 out of 7 bullish indicators support positive momentum
2. 108.3% potential return on your investment
3. Theoretical edge of 25.3%
4. The stock price is only 7.5% away from the price for you to make the maximum gain!

How to Find More AR Bull Call Spread Strategies

How you can find bull call spread trade ideas for other stocks

See more trade ideas for AR

And if you want to find more bull call spreads for other stocks, go to the bull call spread screener

NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades.

The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.