Immunomedics Risk Arb

[boilermaker75]

wrote 85-strike, Oct 23 expiration puts for $1.10 per share today.

[boilermaker75]

It looks like this risk arbitrage play is over.

 

It was nice while it lasted!

 

 

[Haasje]

Have to wait till options start trading near the current share price to see if they are worth selling.

 

I like selling puts in these situations because you know exactly your return and the end date.

 

isn't selling a put on a merger arb, basically the same thing as being long announced spread merger arb?

 

I guess the puts can work better if there's unexpected timeline extension but not a break, but it's basically the same thing, right?. You do lose the overbid optionality, but that's pretty rare and only relevant to some situations.

 

Risk arbitrageurs rightly describe their business as one of put selling.

 

Is there a non-obvious reason that put sales are better than being long the spread?

 

I like writing puts if I have a different opinion on the close, the break price or certain events compared to the market. You can more clearly express how you think differently about the deal via options (obviously for better or worse :) )