Gents,
I rarely asked for advice but this time am a bit confused and
feel
stuck in an option position turning odd:
On Dec 21 after seession
close there was an official annoucement that
GLDN (Gold Telecom) would be
purchased by VimpelCom at a price of
$105. Tender to commence on Jan18 or
before. At the time price was at
103 and this is why I decided to purchase
the stock (1000 GLDN) while
at the same time selling 10 PUT Jan100 and 10
CALL Jan105. My
expectations was that the stock would quickly jump to 105
and stay
there. So I would benefit from the stock bought at 103 ($ 2,000)
and
wait for the expiration of both PUT and CALL on Jan18 which would
normally expire valueless.
I got 0.65 for the PUT and 0.50 for the CALL
on Dec 24 and bought the
stock 102.35.
But the problem is that the stock
is since then dropping steadily and
now at 99.35!!
How is that possible
as the stock has been offered $105 a share ??
Are some of you guys familiar
with this situation? What would be your
best advice here? I feel like I want
to close out everything now but
not sure this is the wisest thing to
do.
Thanks by all means.
Carl