ING - reverse conversion? effect of rights issue?

Discussion in 'Options' started by saratur, Nov 23, 2009.

  1. saratur

    saratur

    ING December put-call parity is out of whack; 15 put less 15 call creates a synthetic long with a discount of about $2.20; stock at 14.27 so inverse conversion gets $1.47 in premium.

    My question - what could the effect of the upcoming rights issue on this trade be?
    Any expectation on the value of the rights, and what will a short stock need to "pay"? Will there be an adjustment for the option delivery or not?
    It appears there is no difficulty borrowing ING.