It’s obvious that the market expects a move of around 52% for ACB by the June 19 expiration date. This estimation means that ACB could move up to $3.04 or down to $0.96 by June. With all things considered, our aforementioned call spread structure could easily profit from such upside movement, in which our June 19 call would expire worthless, allowing us to increase our gain.
For our given structure, the capital at risk is $200 for each put option sold if Aurora falls to $0, while the potential upside is capped at $100 for each call spread bought. However, considering the capital at risk, in the worst-case scenario, I find it unlikely Aurora Cannabis stock would drop below the $1.50 price level.
Want to read more recommendations based on options structures and options market analysis? Check out Why You Should Buy Aurora Cannabis Stock in 2020, Apple: An Options Strategy if You Expect a Recession, and NIO and AAPL, Two Stocks with Unusual Options Activity.
View more information: https://marketrealist.com/2020/01/how-buy-aurora-cannabis-stock-minimal-risk/