Synthetic Long Discount Alert: TILRAY INC. CLASS 2 COMMON STOCK $TLRY trading at a 22.38% discount for the 15-Jan-2021 expiration

Quantcha now offering unlimited commission-free options trading.

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for TILRAY INC. CLASS 2 COMMON STOCK (TLRY) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

TLRY was recently trading at $94.75 and has an implied volatility of 37.91% for this period. Based on an analysis of the options available for TLRY expiring on 15-Jan-2021, there is a 68.27% likelihood that the underlying will close within the analyzed range of $34.92-$293.82 at expiration. In this scenario, the average linear return for the trade would be 105.61%.

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 put position is opened at a strike of $95.00, which is already $0.25 in-the-money. However, its sale more than offsets this moneyness and the cost of the long call that the trade results in a net credit of of $21.50 per share. The final position can be considered as having a discount of $21.25 per share over the underlying price of $94.75 for a 22.43% 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 12/6/2018 10:41:53 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.