If you were to buy it at 98 and wait till it got to 100 you'd only make 2 percent. It may take a while for the deal to go through, and there is always a chance that the deal could not go through for some reason. In that case the stock would get crushed and you would lose a lot. Also, factor in the risk free rate that you could get with a short term treasury, and you will not make much for the risk. But this is precisely why your original trade was poor. Arbitraguers will step in before the price goes down too far, because the further it gets from 100 the more profit you can get for very little risk. 2 percent just isn't juicy enough considering the time frame and the risk of the deal failing. But 3%, 4%, or 5%. Now that looks good. Thats how many will look at it. I see you realize that now. You had an opened mind and didn't get defensive when I criticized your terrible trade. You realised you were wrong and changed your mindset. You may be well on your way to becoming a good trader.