Synthetic Long Discount Alert: INDIA GLOBALIZATION $IGC trading at a 16.91% discount for the 17-May-2019 expiration

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Quantchabot has detected a promising Synthetic Long Stock trade opportunity for INDIA GLOBALIZATION (IGC) for the 17-May-2019 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

IGC was recently trading at $5.12 and has an implied volatility of 118.65% for this period. Based on an analysis of the options available for IGC expiring on 17-May-2019, there is a 68.27% likelihood that the underlying will close within the analyzed range of $1.26-$21.39 at expiration. In this scenario, the average linear return for the trade would be 83.46%.

Upside potential: This synthetic long position offers the same potential benefits and liabilities as a long stock position, but at a discount due to the significant premium at-the-money puts are trading at over calls. In this case, the long call position is opened at a strike of $5.00, which is already $0.12 in the money. An out-of-the-money put at the same strike is sold to finance the call, resulting in a net credit of $0.75 per share. The final position can be considered as having a discount of $0.87 per share over the underlying price of $5.12 for a 16.99% total.

Downside risk: This discount is generally a sign of the stock facing considerable short pressure, and may indicate that the stock has become hard to borrow. However, if you have a long view of the underlying over this period, it could be a good opportunity to benefit from the upside at a major discount.

To analyze this trade in depth, please visit the Quantcha Options Search Engine.


This is an automated post generated based on a market analysis of delayed data at 10/12/2018 10:44:52 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.