Jump to content

SHLD two for the price of one


ERICOPOLY
 Share

Recommended Posts

Write 1x the at-the-money SHLD 2013 $60 put for roughly $20, buy 2x the $60 2013 call for nearly $10.

 

Leveraged 2x upside with 1x downside.

 

Why would anyone buy the shares with this deal going on?

 

Are the shares on "special"? In other words, is the cost to borrow steep?  This is often the reason for the asymmetry you describe.  If so, an optional deal might be to buy the shares and rent them out to the short sellers.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...