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Arena Pharmaceuticals, Inc. Message Board

  • j_butler1959 j_butler1959 Apr 16, 2013 2:53 PM Flag

    More reverse conversions today in June and July strike $12! What is going on here!

    Today's activities.

    4000 April calls and puts at a strike of $12 = 400,000 shares
    2000 June calls and puts at a strike of $12 = 200,000 shares
    2000 July calls and puts at a strike of $12 = 200,000 shares

    And of course, 18000 May calls and puts at a strike of $12 = 1,800,000 shares

    Shares created out of thin air available to short. Why?

    To hold the price down as ARNA awaits good news from DEA and EU. These shares will be shorted naked, dumped onto the market, crashing the price.

    No other purpose for a reverse conversion especially when shares are extremely scarce.

    Sad the retail investor has no chance in this game at all. Very sad. Playing field is anything but level.

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    • 1500 RCs on Fri. 5/3 at 11:14. Yahoo seems to have same amount traded today, but I cannot find it elsewhere.
      Anyone know the time it occurred today? If it did?

      Sentiment: Strong Buy

    • This is more than just a coincidence. I believe we are on the verge of DEA or EU announcement and shorts are preparing to crush the pump. Over 3 million shares let loose at market will do the trick.

    • Definition of 'Reverse Conversion'
      A finance and risk management technique based on a put-call parity strategy that consists of selling a put and buying call (a synthetic long position), while shorting the underlying stock. As long as the put and call have the same underlying, strike price and expiration date, a synthetic long position will have the same risk/return profile as ownership of an equivalent amount of the underlying stock.
      From Investopedia:
      In a typical reverse-conversion transaction, a brokerage firm short sells stock and hedges this position by buying its call and selling its put. Whether the brokerage firm makes money depends on the borrowing cost of the shorted stock and the put and call premiums, all of which may render a return better than the money market with very low risk. In the context of futures markets, a trader would be synthetically long and short the underlying futures while looking for arbitrage opportunities.

    • How do you think buying and selling options makes shares available to short? Is this a simultaneous short cover with an option trade? I am surprised ARNA is not down on the VVUS news. DEA is killing ARNA shareholders!

    • Looks like they are evaporating April calls. S!@!@H!#$!@.
      I just saw this message on the IV board:
      The SEC returned my email and call

      Usually the SEC sends a standard email back saying thank you, we received your complaint etc.

      They do look at each case because it's usually signed by a lawyer or worst case a public education person.

      But today I had a different kind of email.

      It was from the NYC office. I had alerted a chief there and his assistant who had prosecuted an illegal reverse conversion before and sent them additional info on top of the official forms I filled out to make sure these reverse conversions are done properly and are not abused.

      A gentleman from that office emailed AND called me today. In the email he wrote:"We are taking your complaint very seriously, and have referred it to the appropriate people within the SEC.". Good stuff ! It wasn't so much a complaint but a heads up but at least I feel good knowing the cops are looking into a potential abuse scene.
      Can't happen fast enough

      Sentiment: Buy

    • papa.francisco Apr 16, 2013 2:56 PM Flag

      Many investor take as an opportunity to add more!!!

    • My guess is that they plan to spoil any near term positive news. The deck is stacked against arena.

      Sentiment: Hold

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