It's a cheap way to buy more stock until it ain't... It must have felt pretty horrendous to have been in this massive riskie on the 15th (apart from the delta, as far as I can tell from the closes, the vol on the Jan17 60 strike went from 72 to 88 that day). Maybe, given the losses on the outright it really didn't even register, but still. IMHO, with his risk management practices or lack thereof, Bill Ackman should stay away from options. Just my Z$2c... BTW, Matt Levine (who is excellent, btw) has provided the expiry dates for the options in his article.
And in size, too... Frankly, I find it utterly incomprehensible. There is just so much wrong with that, I don't know where to begin.
Matt Levine at bbg has no idea what he's talking about. He ignores that Ackman is short puts. Levine is treating it as a long call; Levine has no understanding of the mechanics. Yes, Nomura had to short stock, but they've made their money.
I didn't look at the PNL graphs, to be honest... I just wanted the dets of the trades and then sorta stopped. Lemme look again.
Wait, hold on, this wasn't a straight up riskie, it was a seagull... He bought a call spread and sold a put. It just keeps getting better and better.
Sorry, don't see what's wrong with Levine's PNL graph. One curious thing I also notice is that Ackman did the trade with the two counterparties whose analysts had the two highest VRX price targets. Funny how that works, innit?