I would have never have thought of this trade had you not brought the option activity to my attention, I do believe it is a sweet deal also. it does take some purchasing power and why I sold 5200 Qcor shares today and bought back my MNK 80 calls to do this. but it has less money out of my account then the previous trade and stands to make a lot more money. just have to keep MNK above 75 break even will be around 62.50 mnk. so the risk is not as high as it might seem except for the deal not closing and I think that is almost nil. but some feel differently.
I wish you would be right but I am not expecting anything except a few new buyers that werent aware of company and its prospects, This stock except on rare occassions moves very little each day, low volatility I have seen several days the last month that the range was less than 4 or 5 cents most of the day.some as low as 3 cents.
correction the net cost of the option I put on today was 110900 with a max profit of $ 112000. or around a 100% return if MNK closes above 75 at merger. They have my account major messed up right now with some wrong trades that wont be corrected til monday morning.
he has stated he has an offer to sell in at $15. wish he would get it lol but then i would be gone and wouldnt care.
in most presentations by most companies they do not put out any new news, so it is only an event for the new people it may attract to the stock that didnt previously follow it. I have never seen a merger/partner announced that wasnt previously known, new trials or anything that is new.
I did 100 contracts of OCT Qcor 75 calls long 100 contracts of Qcor 65 puts short and 90 contracts on MNK 75 calls short today at a net cost of $128,400.00 to make a profit of $94500 if MNK closes at our above 75 and took off 5200 shares of QCOR long and 46 contracts of MNK 80calls short for a profit of $ 65,000 that I had placed earlier. Thanks for this idea delbayu.
i did a little more checking when I answered the question it seems that someone also did 1977 mnk calls aug 14 at 75 exercise. This got me to thinking about an arbitrage situation which I will do tomorrow. I think that not all of those were done by one individual but most and that what they did was in multiples of below
bought 10 Qcor aug 14 75 calls 19.10
sold 10 Qcor aug 14 60 puts 1.35
sold 9 MNK aug 14 75 calls 6.00 net cost 12.35 to make $9.925 per share
this way when the deal goes down which this person feels will happen by aug 14 expiration he will be buying QCOR at 75 and delivering it to cover his MNK he feels will be above 75 that he has sold and the put income will expire worthless. The risk is that MNK doesnt get to 75 at closing then he owns QCOR at 86. to 87 area and would lose money should it go below that amount. which would equate to a price of $63.55 on MNK at time of merger. which is 20% below current price. So this investment means he doesnt need MNK to go up just stay where it is to make an 80% plus return. I really do appreciate your bringing up the question as it got me to looking at the proposition and the MNK options for Aug and trying to put together what was done. Very interesting. If I am correct the guy just made a $2.5m bet that this closes with MNK over 75 and to make $2m
the new loan with Citibank is a variable rate that will start out at 10.25 which is lower than the fixed rate at Deerfield of 12.25% and should be lower over the term of the loan IMO. What really surprises me is the rates corporations are willing to pay, I got a farm loan line of credit at 6% and 4.5% from 2 different banks. but I had good collateral. I hope they pay this back in full during the 5 yr term of loan.
does anyone know when the merger is to be completed, I have not seen an announcement
buy well sell well. I always told people you made your profit the day you buy on real estate not because of the inflation, you either buy well or you made a bad deal, most real estate deals I did i could turn quickly for 10% or more profit, I bought an office bldg once and sold it at closing for 20% more. have done that with 4 or 5 farms. So overpaying is overpaying no matter where the price goes and I hope it goes above $4.50 tomorrow
Sentiment: Strong Buy
not likely I have a core of 10k shares and I trade 5k almost daily outside my core, I bought and sold 10k shares today for a 4 cent share profit and only 20 in commissions. The size of the purchase wasnt enough to get me excited about someone knowing anything materilal.(400) It was not a smart trade regardless of what happens tomorrow when the individual could have bought it easily for 2% less during the day.
the more I have given this thought the more I like the idea that I gave you below. I have put serious numbers to it buying 100 QCOR 75 calls, selling 100 QCOR 60 puts, selling 90 mnk 75 calls. If it falls apart i would be out 116k with qcor ging below 75 and mnk going below 75 and not be really out more unless Qcor went below 60 then my cost in the QCOR stock i bought would be $70.75 per share If MNK closes 75 or above I would have the QCOR stock to deliver at a price of $97.275 per share to cover the MNK calls I sold. MAX PROFIT of 107k on 116k investment for 3 months I would just need mNK to close above 75 and wouldnt lose any money as long as MNK closed above 63.08. I owe you a beer or bottle of wine
if I am correct the person with that type of play over a million dollars thinks it will close before mid August. That in itself makes me very happy. Glad you brought this to my attention. It is something to put in the back of my mind for future plays. I could cash out of all my current positions and take the profit and do this for a double and make almost as much as holding on and having no downside risk left. It is real tempting.
my guess is someone bought the calls and sold the puts to reduce their cost of the calls so that the premium would be negligible plus then they sold 75 MNK aug calls for a complicated option play on the arbitrage. This would get them in net cost in the QCOR calls at $3 under current stock price with the capability ot making additional on the arb play. they will own the Qcor and deliver it against the MNK calls sold they plan on keeping the QCOR put sales income, keeping the MNK call sales income and making the difference of $7 on the current spread minus the $3 premium on the QCOR calls so they will net $7-$3+1.3+6 or $14.70 profit if mnk closes above 75 on a $13 investment per share. It is really an astute trade if you believe that MNK will be over 75 at closing. I wish I had done it.
has closed down almost 40% in the last 2 months and is not at $7.11 still money to be made but it looks like a few more have entered and believe this will close. Slow and Steady, were did i hear that? hope all longs are happy and making money. Kaching, the sooner this closes the better.
they were talking about enemy soil but when specifically asked about on our soil he would not answer the question
Sentiment: Strong Buy
and we have been hearing the same complaining from you so why not sell and quit worrying about it. I personally am enjoying and profiting from this stock movement.