Synthetic Long Discount Alert: SINO-GLOBAL SHPPING $SINO trading at a 10.56% discount for the 17-Sep-2021 expiration

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Quantchabot has detected a promising Synthetic Long Stock trade opportunity for SINO-GLOBAL SHPPING (SINO) for the 17-Sep-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

SINO was recently trading at $5.87 and has an implied volatility of 122.99% for this period. Based on an analysis of the options available for SINO expiring on 17-Sep-2021, there is a 68.27% likelihood that the underlying will close within the analyzed range of $2.59-$13.34 at expiration. In this scenario, the average linear return for the trade would be 52.08%.

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 $0.87 in the money. An out-of-the-money put at the same strike is sold to finance the call, resulting in a net debit of $0.25 per share. The final position can be considered as having a discount of $0.62 per share over the underlying price of $5.87 for a 10.56% 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.