No, I understood your implication. You are expecting the stock to converge to the deal price soon. we bet in short run, not months long run. close in 1 day or 2 weeks. I assume the above to imply you think that ATYT will converge to the deal price in one day to two weeks? Good luck with it.
I would just leave it. I don't think the time involved and the obvious up and downs along the merger path is worth the money. So I would just leave it.
No. that is not what i meant. Yield will never be closed in 1 week. Never in history, never in future. What i meant was "traders will trade the stock toward the final price using the yield with risk of the deal not going through calculated times the bond yield" So it is very safe to trade the stock in the first 1 day to 1 week after the news, because in that time frame, there is a NEWS VACCUM. The lack of news is great for swing and day trading, not good for position trading. It is the same golden time between 10am and 3:30pm most day traders are using. Buffet's method is that if he thinks the deal will go through 98%, he will bet 100% and borrow money from his capital pool (which earns money market rate or bond yield) with the two hedged pair of the M&A. in today's case, short 0.22 shares of AMD for every long ATYT, as long as the different % is greater than bond yield. I waited until the market settled a price of ATYT and AMD and looked at the yield at those settled price, then decided it is good for day trading, then find the trend and trade along the trend. Frankly, i think the deal is stupid, and will be positive for INTC and NVDA. Take a look of INTC and NVDA shares. Both are up.
That is what they said with GTK. See what happened last week. How about SCHS last year. The deal fell apart the week before the deal was supposed to close. How about MOSY in 2004. The deal looked great, but then there was a patent infringement lawsuit and SNPS walked away. I am not disputing that the AMD-ATYT will not get done. I am disputing how you say that there are no risks involved.
NVDA closed at 19.56, 40c up from my cost. plus 11c earned from ATYT and 14c earned from another block of NVDA. Up 65c. Stop-loss is 35c. Max loss I had today 20c. After market, it is up another 30c. RealizedReturn/RealizedRisk=95/20c. MaxReturn/MaxRisk=500c/35c.
what are you talking about? still learning from trading books? yes, i read most of the most popular trading books. none of them said this: you have to look from outside of the box. i have no intend to increase my long position. good luck on shorting. i am going to trade another event stock tomorrow.
Ok, i have a question. I know how mostly everything works, i know why AMD went down and why ATYT went up. My question is, When does ATYT stop trading? Can you still buy ATYT stock? How does all that work? Any help would be greatly apprechiated. Thanks in advance.
ATYT made a huge GAP UP.. if u want to LONG this stock for long term. id wait till moving averages(MA) catch up...usually it would either hold at this price or readjust (down) close to the MAs.