Collected little more than $45 K by selling DNDN put option
Sold 240 contracts naked put option of DNDN January 2105 strike price of 3.50
If the stock stays under $3,50 by Jan 2015 I'm obligated to buy DNDN shares @ 1.70 a share which is fine with me I'll still get to keep the 45K premium that I collected.
and If DNDN gets bought out at any time from now @ a price of 3.50 or more I'll pocket the $45 K and that's the end of the story.
I think this is the best way to play this stock if you think the company is about to be taken over.
Since I'm bought it at 53% discount to the current price I think its a little bit less riskier .
and as far a worrying about it for 16 months, you could always buy to close your position and since you have the time decay on your side ,even if the stock goes lower you might still come ahead.