Put Traders are causing lower C share price, not the Arbs.
Those who sold the Puts that are out the money have to sell their shares to cover their calls. For example, they sell their $10 puts at $6.75 and the price of the share is $3.25. They have to sell their shares so they can pay the $10. This is what is causing the dip in shares not the Arbs.
bigvicmayo, that's not completely accurate. Not not everybody is waiting for the Q2 earnings announcement.. who told you that? first we were waiting for news on conversion? then we were waiting for conversion to take place.. then we've been waiting for the third Friday and a possible boost in price according to the lousy $5.00 max pain theory. and now we're waiting for the second quarter earnings?
what is this talking? God knows what longs will be waiting for next. the second coming of the messiah? parachuting on the rooftop of Citigroup Center on lex and 53rd? escorted with two angels?
Options expire this Friday. If C was above $5 it would shoot higher b/c then more Calls were in the money. But b/c it is below $5, the Puts are in the money. Just look at the June options you will see. Puts are dumping their shares to get cash to cover. No one else it trading, everyone else is just waiting to see what Q2 is going to look like.