You cannot claim 'limited risk' - sure if merger goes thru, you only lose ~$5 and if merger fails, you'll reap +$10 points But how do you assign PROBABILITIES to each situation? So you're telling me you can get into the head of Yang and Balmer and predict how the negotiation will turn out? Pure gambling.
i was editing my post when you replied sorry about that. no you can't get ahead of them but you can tell from the talk that there was a significant chance that the deal would collapse when you looked at the apprehension from yhoo and its eagerness to explore other options. further msft holders already felt that they were bidding too much for yhoo and you knew yhoo wanted more money because jerry yang is insane. anyhow...the scenario didn't play out exactly how i was looking for it. i didn't think MSFT would raise their bid by this much only to have crazy jerry yang say they wanted more. but there was major risk to the deal and you know that yhoo is probably worth about 50% less if the deal fails. big time reward and minimized risk with put options. major risk is the time it takes for things to play out. not pure gambling.
and i am also sorry if i am writing in very choppy short thoughts. hopefully, you get the points i am trying to get across.
he may lose a point or so but i don't think he will get run over. people still have HOPE that yhoo can figure something out....but they won't because they are retards. either way it will give him time to get out of the trade if he chooses. edit....he may be down a point in the trade tomorrow. i think selling the volatility here may be a good options trade. so maybe selling those 17.5 puts at this point in time isn't a terrible idea after the drop on monday.
http://finance.yahoo.com/tech-ticke...ot-33-Offer-in-Writing?tickers=yhoo,msft,goog Come on, my writing is in black and white! Who do you think I am?
This stock is done. No one is gonna pay 37 or whatever and since yahoo keeps losing marketshare to google its share price will slowly erode. Yahoo has no growth and little potential.