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Long and all in.
I am wondering if PPS might stall here for a couple of weeks. Any recommendations on which calls to write to generate some cash, or is it too risky? Definitely do not want to lose the stock. Thanks in advance.
The answer to your question would also depend on the supposed price of your theoretical takeover. Assume for some stupid reason that we do not know about now that the company would accept some crazy low ball offer -- then those deep out of the money calls ( if at a higher strike price than the takeover price ) would become worthless.
Good luck with whatever decision you make.
I am using a browser that blocks pop ups and I am not experiencing what you mention. Check to see if your browser can be set to block pop ups and check again.
Doing the math then the 8.5 billion figure in euros would translate to a stock price of just over $27 US. Would they be able to get shareholder approval for such a low figure?
Most on this board I think would scream foul. I could see the same 26% premium but would have hoped it would be tacked on to our price after we reach 40.
I think your options would be converted and adjusted for the new entity. Of course a straight buyout at a price lower than your strike would cause them to go to zero.
I think you have it right but it seems to me that in relation to Antegren, BIIB already has a merger with Elan in essence. Both companies split 50/50 on Antegren as it is and maybe they know more about our pipeline.
I am thinking of booking a partial amount of profit for the 2004 tax year so as to slightly reduce the amount in future years (after Elan skyrockets), but rather than just selling some stock and immediately rebuying it I was wonder if someone could pass judgement of something else I was thinking about.
What if I sold some stock and immediately bought well in the buy Leaps such as JAN 07 strike of $10?? Good or bad??
Advice is appreciated and thank you in advance.
First of all I would like to thank for taking the time to give your advice. Although I will not go into chapter and verse of the situation, I do feel compelled to give you some idea since you were kind enough to help.
For the tax year 2004 I will be reporting very low income and I also have a fair amount of long term capital losses carried over. The tax on long term capital gains is only 5% up to a taxable income $58,300 but then rises to 15%. My thought is that by taking some of my unltimate gains in Elan up to the limit where I would only pay 5% tax that it enables me to spread the cap gains over several years to in essence maximize the 5% portions.
I ultimately believe Elan will be recognized for the jewel it is and the pps will reflect, and therefore never want to be out of the stock. Unfortunately Fidelity will not allow me to put in the transaction (sell stock/ buy leap) as one combined unified order (such as buy/write orders, and since I am not on margin and do not have extra cash I have to figure out a way to sell the stock and immediately buy the leap which seems to be very illiquid.
I thank you very much for your input.
Thanks your idea would be the perfect scenario and I realize that it might continue running as my sell order is filled. I guess a little luck would come in handy. So even though for instance the JAN 07 $10 call has not traded since Oct. 25 you feel that if I go in at the ask and if my order size is significantly less than the ask size that I would be filled quickly? I would usually make it an ALL or NONE order for something somewhat illiquid.
Just wanted to update both of you regarding the question you were trying to help me out with Thursday morning.
I was unsuccessful in my attempt to sell some stock and buy the Jan 07 $10 LEAP. On the open Thursday I was not quick enough to sell and then pretty much felt that we would then drift up (which is what the pps did). Today I almost sold after 10 minutes but glad I did not as the price started to streak up.
Watching the option early this morning though, I got a quote at one time where the bid and the ask were identical and no trade occurred. I call an option specialist at Fidelity and although they do not want to go out on a limb he said there would always be a possibility that even if I put my order in at the ASK and even if ask SIZE was larger than my order that I might NOT get filled. That worried me a lot and as everyone can see that option has not traded since Oct. 25, so I may have to wait until after the Antegren approval pop.
Anyhow wanted to thank you guys for your help and to update you on my endeavour.
Yes. You are absolutely right. I had been hoping to maybe not only book some of the gain for this year but by buying LEAPS also free up more cash to buy either more Elan or other compelling situations.
You are correct about the wash sales rule --- it only applies if you are selling at a loss. Any newbies (buyers of elan within the last couple of years) are not sitting on any losses!!
Thanks for the input and if I do not get the opportunity to make the swap for leaps and still want to realize a little bit of gain for this years taxes I will just do that..... sell the stock and buy it back immediately -- in essence only losing the commission.
I am still trying to find the right opportunity to sell some stock and immediately buy some Jan 07 $10 calls. Should not today be a pretty good chance if only because it is a holiday here in the US and no chance of SEC or FDA news?
Any suggestions welcomed. Thanks in advance.
Thanks. I just found something on my Fidelity order screen that I wonder if I can take advantage of. If you remember I was saying how they would not let me sell the stock and buy the option as one unified transaction on a spread basis. Well that is the case if I indicate that the buy of the option is to buy to open, however I just tried it by indicating on the drop down menu that it would be a "buy to close" and it lets me proceed to the final step of putting in the order.
Can I get in trouble if I indicate it as buy to close but really I am opening the position?? There is no way they would take it away from me is there if I got filled??
Thanks. Yeah I thought the same but it was funny that it let me proceed right to the final screen. Thanks again.