Synthetic Long Discount Alert: ATERIAN INC $ATER trading at a 10.18% discount for the 20-Jan-2023 expiration

Quantcha now offering unlimited commission-free options trading.

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for ATERIAN INC (ATER) for the 20-Jan-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ATER was recently trading at $10.80 and has an implied volatility of 118.49% for this period. Based on an analysis of the options available for ATER expiring on 20-Jan-2023, there is a 68.27% likelihood that the underlying will close within the analyzed range of $2.74-$42.89 at expiration. In this scenario, the average linear return for the trade would be 64.40%.

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 $10.00, which is already $0.80 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 $0.30 per share. The final position can be considered as having a discount of $1.10 per share over the underlying price of $10.80 for a 10.18% 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.