"I don't know if I'm missing something on this deal, but everything I can find seems to indicate it's a done deal. I might end up regretting this one, but the returns are high enough I'm going to take a chance on this."Well I was missing something apparently. The option contracts were cash-settled yesterday and just like that I was missing $646 from my account. After talking to my broker and looking the memo released by the Option Clearing Corp(http://www.theocc.com/) it appears the deductions are for Spanish taxes, withholdings, and conversion ratios. You can check out the memo by searching for TLVTF(the ticker changed when it was delisted as part of the acquisition process) on the OCC website. So I'll take a loss of $326 on this trade. I don't like losses, but all in all, I guess that's a fairly cheap lesson in foreign arbitrage trading.
On a brighter note, I went ahead and closed out my CSCO short options from last May and my rolling monthly puts that I extended in November. They were trading down to $0.08/option so almost all of the upside had been realized. I realized gains of $98/option on the original trade and $201/option on the rolling trade. I will almost certainly do more naked puts on CSCO, but unless it gets knocked down hard, it won't be until next year.
The Numbers
- Cash: -$678
- Short Option: +$678
- Available Margin: +$4,800
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