Synthetic Long Discount Alert: CIIG MERGER CORP. CLASS A COMMON STOCK $CIIC trading at a 16.14% discount for the 17-Dec-2021 expiration

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Quantchabot has detected a promising Synthetic Long Stock trade opportunity for CIIG MERGER CORP. CLASS A COMMON STOCK (CIIC) for the 17-Dec-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

CIIC was recently trading at $28.74 and has an implied volatility of 112.32% for this period. Based on an analysis of the options available for CIIC expiring on 17-Dec-2021, there is a 68.27% likelihood that the underlying will close within the analyzed range of $9.79-$84.80 at expiration. In this scenario, the average linear return for the trade would be 66.88%.

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 $30.00, which is already $1.26 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 $5.90 per share. The final position can be considered as having a discount of $4.64 per share over the underlying price of $28.74 for a 16.14% 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.