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Ben, Bob, Earl, thanks for giving your advise. I am still in the
position which is improving smoothly now as the options are losing
value each day - however still losing on the long stock position.
Your comments make one thing clear to me: trust the charts and only
the charts, which fortunately look pretty good here.
Thanks again and Happy New Year.
Carl
--- In realtraders@xxxxxxxxxxxxxxx, "EAdamy" <eadamy@xxx> wrote:
>
> I have watched a number of buyout arb spreads widen on seemingly
solid,
> uncontested deals, some significantly. Generally, I think there is
> increasing uncertainty in the markets regarding financing and asset
values.
> When doing these arb plays one should take a look at the charts and
see
> where the stock(s) might go if the deal falls apart, then plan
accordingly.
> Good, recent example is Meyers Industries (MEY).
>
> Earl
>
> _____
>
> From: realtraders@xxxxxxxxxxxxxxx
[mailto:realtraders@xxxxxxxxxxxxxxx] On
> Behalf Of Carltrek Vanhaes
> Sent: Friday, December 28, 2007 5:06 AM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: [RT] GLDN tender offered at 105 but price dropping at
99.50 !
>
>
>
> 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
>
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