COTY buy-write implications on Tender

Discussion in 'Options' started by gescob3, Mar 23, 2019.

  1. mskl

    mskl

    the Conversion market is suggesting that the tender is worth about 15-.20 per share. This market locks in a loss on the non-tendered shares. ie you lose .15 on 80% of your shares that are not sold in the tender and you make .35 on 20% of your shares that are tendered. The market is however suggesting that many won't tender so you may get 30-40% depending on proration

    not huge but there is lots of arb trading going on. keep an eye on how the pricing changes
     
    #11     Mar 24, 2019
    gescob3 likes this.
  2. FSU

    FSU

    If you don't have a good understanding of the risks of your position in the tender (I don't so I can't tell you how it will work out) I think you should exit the position before the tender. You can enter the order as a spread to give up less edge.
     
    #12     Mar 24, 2019