Synthetic Long Discount Alert: BLACKSTONE MORTGAGE TRUST INC $BXMT trading at a 10.06% discount for the 17-Jan-2025 expiration

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for BLACKSTONE MORTGAGE TRUST INC (BXMT) for the 17-Jan-2025 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

BXMT was recently trading at $17.29 and has an implied volatility of 43.20% for this period. Based on an analysis of the options available for BXMT expiring on 17-Jan-2025, there is a 68.28% likelihood that the underlying will close within the analyzed range of $10.72-$32.86 at expiration. In this scenario, the average linear return for the trade would be 74.07%.

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 $18.00, which is already $0.71 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 $2.45 per share. The final position can be considered as having a discount of $1.74 per share over the underlying price of $17.29 for a 10.06% 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.






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