Cornwall Capital is known for buying options on undervalued companies that have some sort of bi-modal distribution. Does anyone know of another hedge fund that does similar? Also Cornwall was able to find cheaper methods to put on a trade using OTC derivatives. If I think company x will go up 50% if the charges on them get dropped, is there a cheaper way to play this rather than buying otm options?
That's not what i meant, what i mean is can i find other alternatives such as, warrants, cfds, or whatever else there is. Or sell OTM call on a similar company to finance the call on the prospect.
This looks cheap: https://www.interactivebrokers.com/en/index.php?f=1595 On average transaction costs for options on stocks characterized by bimodal distributions are high.
I have used the CFDs before they are really great but you have still have the downside risk. Mav if you look at FTR (frontier communications), it is evident that the stock will either be a lot higher or bankrupt in 2 years from now. The 12 strike Jan 2020 calls are trading for $1.10. Or would a back spread better serve my purpose?
You probably seek advanced, brilliant, complex strategies. I seek simplicity. Consequently, if I believed as you initially stated that “company x will go up 50% if the charges on them get dropped” and I wanted to limit my downside risk, I would simply limit my exposure and go look for company y.