thats why i'm selling BRY puts with the 45 strikes because LNCO would have to fall to low 26's for those puts to be ITM. LNCO only fell that low briefly after the short attacks and SEC scare. With the sec scare mostly now gone, I'm thinking LNCO is more likely to rise than fall after the merger is (presumably) approved. And the market overall has risen since the LNCO lows. So LNCO falling to 26's n short term seems lunlikely IMO
A main uncertainty is how long will it take the merger to complete after its approved- the longer it takes, the less advantageous selling puts will be. But I'm thinking the premium in BRY puts will collapse or at least go down after the merger is approved, since the risknpremium in current BRY put prices now is high in part because of the uncertainty of the deal being approved; if it is approved as i am betting, that uncertainty will disappear, so the premium for BRY puts should consequently fall (all else such as VIX etc remaining constant)
the price difference LNCO-LINE hit 0.88 today, lowest its been in a long time. sold some LINE to buy LNCO, if price gap approaches parity I'll swith entirely into LNCO and wait for LNCO to outperform, given its more attractive structure for soome investors
I wonder- given the different structures of LINE and LNCO, there may be greater tax selling pressure on LNCO versus LINE? Could that be one reason for the recent outperformance of LINE?
Public work to receive benefits is an interesting idea! However, I respectfully disagree with your thesis that the government produces nothing. I would argue that the government produces security for the businesses that operate within our borders, via the military; produces a tourism industry by operating national parks; produces an educated workforce through public schools; produces infrastructure of roads ports and airports enabling commerce and trade; produces innovations such as the internet by supporting research and development; etc
meanwhile I am selling long dated BRY puts to harvest extra time premium, on the assumption the deal goes through and closes before my OTM puts expire
I'm looking at selling long dated 45 puts, as i assume the acquisition will go through. My understanding is that the BRY puts with strike below 1.68x the LNCO share price at time of merger expire worthless (in other words, the value of BRY puts at time of merger depends on 1.68xLNCO unit price, not the BRY share price). For the case of the BRY 45 puts, they will expire worthless as long as LNCO price is above 45/1.68=26.78, 15% downside protection in addition to the premium obtained by selling puts. SO As long as the deal closes well before the put expiry date, then the put seller keeps the remaining time premium of the put price. (Selling the long dated 50 puts- while definitely exposed to significant risk in the event the deal is not approved by majority of shareholders- also looks tempting, in that the BRY 50 strike puts will expire worthless as long as LNCO closes above 50/1.68=29.76 at date of merger).
Does this make sense? How long might it take for the merger to finalize, assuming it is s approved? And- Beyond LNCO selling off or the deal not going through- are there other risks i am overlooking?
"Wait until the people discover health care ins. can only be bought through the O'Bama Unaffordable Health Care Act exchanges : is a completely inaccurate statement, at least for wisconsin. The states largest health insurers have opted to not offer plans on the exchanges. they are still offering te same plans that they offered before
Obamacare is not goign to reduce choice. for m any people, its going to increase it
what do you mean economy on life support? unemployment BEEN IMPROVING (although government shutdwn not helpful in that regard and still a bad situation overall for qorkers but corporate profits fine hence the mkt near highs), consumer confidence decent, growth in manfuacturing here and in china promising trends, germany keeps on ticking, money is still easy and rates still quite low, gasoline prices are coming down (a boon to domestic manufacturers etc) as the shale boom keeps booming, etc. If out government wasn't so pathetic I'd almost be optimistic LOL