We know the outcome. In 5 days its completely done.
Let's buy Affymax. The whole thing and then some. and possibly for nothing. We want 110% minimum.
My plan called for $37.5 million in 12 accounts to cover the possible exercise of all contracts which is required by the broker. (Wow that's a lot of money)
Currently there are almost 32,000 Oct $2 calls open - that's nearly 3.2 million shares. Almost 10% of the outstanding shares.
We are COMMITTED TO BUYING this so WITHOUT FEAR we
Start selling Jan14 puts, anything with a premium.
First the deep in the money puts. The $35 for $33.80 and as many as possible. Our goal 10,000+ contracts
At the same time we start buying calls for 5 cents.
First the June they will have the least premium and we know this deal will close before expiration.
Then out to the July at higher strike prices as long as they are 5 cents.
I tried but no one stepped up. TBG took over and affy's delisted. No more opening contracts.
Can any of you do the math?
For those who don't know how options work...
CALL buyers pay call sellers for the right to buy their share at the strike price up to the expiration date.
PUT buyers pay put sellers for the right to sell their shares at the strike price up to the expiration date.
here's an example of a put
I have sold 5 Jan2014 $3 puts for $2.30 that gives the buyer the right to sell me his 500 shares to me for $3 at anytime up to 3rd week of Jan.
If exercised my net cost for the 500 shares will be 70 cents a share or $350
($3 - $2.30 I received)
If the share price is above $3 then the put owner will not exercise.
here's an example of a call
I have bought 10 July $2 calls @ $.15 for a total of $150 that gives me the right to purchase 1,000 share for $2 until the 3rd week of July.
My net cost for the 1,000 would be $2150 and would only be exercised if the share price was greater than $2.
Each contract is for 100 shares. 10 contracts = 1,000 shares 1000 contracts = 100,000 shares
10,000 contracts = 1 million shares.