AH on Friday there were lots of news that it seems the deal is imminent. Considering recent stock's price drop because of two factors (1- market drop and 2- a rumor last week that yhoo might consider other avenues than selling) I believe it is wise to go long YHOO this week based on recent news.
I am bullish through shorting PUTs. I have over 200 contracts naked PUT 15 and 16 for Nov and Dec. I am a kind of protecting myself this way. I know many people would disagree with me. If there is a buyout of say $30, I will get only my Puts premiums. I believe the best strategy is Jan 2012 rist reversal.
I have the following trade on: Long YHOO. Short Jan12 12.5 20 strangle. 1up. View: asian stocks worth about $12/share (us business worth zero). Limited upside to 20. I got 1.5 for the strangle so that gives me minor cushion on a weak selloff.
Up 2% in pre-market. Rumor is that Facebook also might be interested. BBC TV on financial section: some European companies also have an eye on YHOO.
My prediction is that we hould see 17 by Friday 11/11/11 which is weekly option expiry day if no deal happens till then.
Happy BD A good speculative trade on YHOO: Buy 18-19 Nov 18 Call spread for a debit of 5 cents. If YHOO goes above 19 by Nov 18 because of a buyout, your 5 cents would be $1. An increase of 2000% You have to pay about 1.5 commission so you are actually paying 6.5 cents. 10 call spread would cost you $65.
Thanks. And I think that any takeover is going to be at a muted price. But I do still think it will get taken over unless Jerry Yang has a brain fart. He's destroyed more shareholder value needlessly than any other executive. I don't believe in such speculative trades. Generally betting on takeovers is a tough proposition.
I don't do that trade either. That is too speculative but sometimes those trades pan out and if you do it a good size, will turn around your financial life.