Quote:
Originally Posted by daChimp
Thinking of adding 18 Aug 4.50 Calls on RAD priced at .67
If the Walgreen/Freds deal.goes through, Rite Aid buyout price is ~$6. Decision expected by 7 July.
If it fails to get final approval the risk is RAD dropping back to $2.5 to 3.
Appears there is more upside reward than downside risk.
Please advise as Im an options newb.
Yeah this is pretty much what I do. Look at the probability the options are pricing compared to the stock, sometimes there are some small discrepancies where you can get slightly better r/r being in various options/stock.
On RAD I felt like it was definitely worth owning in the low 3s and that the risk was probably better in the stock given all the different possibilities of what could have happened. I sold tiny into the run into the run near 4 and most of it at ~3.10 when WBA called it off.