Quote:
Originally Posted by ToothSayer
I don't know anything either beyond what's been reported. It just seems to me that with a resolution in a bit over a week, you're making a bet on the end game. And if you have no idea how that will play out or what the odds are, it's hard to see an edge going short. Particularly since you need the odds of the deal falling through substantially in your favor for it to simply break even.
If you think they are, great, I have no opinion there. But given the situation, it's hard to see a short just because it's run up a fair bit.
I will chime in as I actually agree with tooth.
The price increase is due to the per share merger price (~$6+), increased activity/large buys, *there are only two voting members on the commission (splits=approval) with deadline fast approaching, and its easier to ride momentum to make money.
The downside: merger not approved the stock drops to ~1.50, only one (fake) news article from NYPost suggesting it wont happen.
If bought in $3 range= 100% gain vs. 50% loss (unless you use loss mgt like **stop loss).
*Im not the expert in this area and based this off of a few articles read.
** I would use caution with stop loss in this situation as this could be manipulated for a sharp drop so big money can scoop up at lower prices. I have set alerts to monitor.
I personally bought 1000 shares and will sell 50% before announcement to lock in gains and let 50% ride. A favorable announcement makes this a winning trade, an unfavorable announcement makes this slightly less than breakeven.