Synthetic Long Discount Alert: FAZE HOLDINGS INC. COMMON STOCK $FAZE trading at a 44.67% discount for the 21-Apr-2023 expiration

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for FAZE HOLDINGS INC. COMMON STOCK (FAZE) for the 21-Apr-2023 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

FAZE was recently trading at $13.38 and has an implied volatility of 135.76% for this period. Based on an analysis of the options available for FAZE expiring on 21-Apr-2023, there is a 68.29% likelihood that the underlying will close within the analyzed range of $4.87-$38.48 at expiration. In this scenario, the average linear return for the trade would be 235.03%.

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 $12.50, which is already $0.88 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 $5.10 per share. The final position can be considered as having a discount of $5.97 per share over the underlying price of $13.38 for a 44.67% 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.