Synthetic Long Discount Alert: OFFICE PROPERTIES INCOME TRUST $OPI trading at a 10.64% discount for the 20-Dec-2024 expiration

Quantchabot has detected a promising Synthetic Long Stock trade opportunity for OFFICE PROPERTIES INCOME TRUST (OPI) for the 20-Dec-2024 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.

OPI was recently trading at $5.88 and has an implied volatility of 49.54% for this period. Based on an analysis of the options available for OPI expiring on 20-Dec-2024, there is a 68.28% likelihood that the underlying will close within the analyzed range of $3.60-$11.03 at expiration. In this scenario, the average linear return for the trade would be 79.70%.

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 $0.88 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 $0.63 per share over the underlying price of $5.88 for a 10.64% 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.