Synthetic Long Discount Alert: ZIM INTEGRATED SHIPPING SERVICES LTD $ZIM trading at a 14.71% discount for the 19-Jan-2024 expiration

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for ZIM INTEGRATED SHIPPING SERVICES LTD (ZIM) for the 19-Jan-2024 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

ZIM was recently trading at $48.66 and has an implied volatility of 64.99% for this period. Based on an analysis of the options available for ZIM expiring on 19-Jan-2024, there is a 68.28% likelihood that the underlying will close within the analyzed range of $22.53-$115.42 at expiration. In this scenario, the average linear return for the trade would be 76.86%.

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 $50.00, which is already $1.34 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 $8.50 per share. The final position can be considered as having a discount of $7.16 per share over the underlying price of $48.66 for a 14.71% 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.