Synthetic Long Discount Alert: JUMIA TECHNOLOGIES AG $JMIA trading at a 11.05% discount for the 15-Nov-2019 expiration

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Quantchabot has detected a promising Synthetic Long Stock trade opportunity for JUMIA TECHNOLOGIES AG (JMIA) for the 15-Nov-2019 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

JMIA was recently trading at $23.28 and has an implied volatility of 73.29% for this period. Based on an analysis of the options available for JMIA expiring on 15-Nov-2019, there is a 68.27% likelihood that the underlying will close within the analyzed range of $12.24-$45.23 at expiration. In this scenario, the average linear return for the trade would be 46.90%.

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 $24.00, which is already $0.72 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 $3.20 per share. The final position can be considered as having a discount of $2.48 per share over the underlying price of $23.28 for a 10.65% 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 6/11/2019 10:41:23 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.