See More Trade Ideas for UVXY
How this UVXY Bull Call Spread Works
The bottom of the UVXY trade card shows us that we would buy one call and sell another with the same 17-Nov-23 expiration (this is a bull call spread as indicated on the top of the card).
Buy: 17-Nov-23 14 CALL
Sell: 17-Nov-23 16.5 CALL
Reasons to Like This Trade
- You can buy this spread for $1.48 when theoretically it’s worth $1.81. Simply put, the market is implying a theoretical edge of 22.6%.
- Your maximum gain is $1.02, which means you can make an astounding 68.9% return on your investment in 18 trading days! (That's if the stock closes at 16.5 or above. $1.02 / $1.48 = 68.9%) At the time of this alert, the stock was trading at 17.85.
- The stock only needs to close at, or above, 16.50 after 18 trading days for you to realize this maximum return. Since the stock is already above your ideal price of 16.50, you have a cushion in the strategy. The stock can decline by -13.3% and you'll still break even. If the stock stays here or goes higher you will make your max gain.
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5 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 16.50. 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 UVXY is really riding the momentum of bullish signals.
Metric Signal Bull or Bear Relative Performance 1-yr Underperform Bearish Relative Performance 3-Mon Outperform Bullish Relative Performance 2-Wk Outperform Bullish Seasonality Weak Bearish Technical Bullish Crossover Bullish Historical Price Action 54% Uptrend Bullish Option Order Flow Sentiment Positive Net Option Delta Bullish
Conclusion
This trade in UVXY looks like a good opportunity because:
- 5 out of 7 bullish indicators support positive momentum
- 68.9% potential return on your investment
- Theoretical edge of 22.6%
- The stock price is already at the price point for you to make your max gain and can even go down by -13.3% and you'll still break even!
Don't Let an Opportunity Pass You By!
How to Find More UVXY Bull Call Spread Strategies
How you can find bull call spread trade ideas for other stocks
And if you want to find more bull call spreads for other stocks, go to the bull call spread screener
Relative Performance
Seasonality: Weak
Technical: Bullish Crossover
Historical Price Action: 54% Uptrend
How to generate statistics on a stocks historical price return distribution
Option Order Flow Sentiment: Positive Net Option Delta
At the time of this UVXY trade idea, bullish option order flow exceeded bearish option order flow. The net option delta volume was 83 K.
Learn more about option delta volume.
Find out the latest sentiment from the options market for UVXY
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How to Screen for the Best Bull Call Spread
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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. You can read more about option risks and characteristics at theocc.com.
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