Here's the ultimate cheap MSFT gamble: buy at-the-money or slightly OTM puts and calls AT EXPIRATION.
That is, assuming that MSFT gets locked to the nearest strike, as it often does - let's say it's 95 at November expiration - buy the Nov 95 puts and Mov 95 calls at expiration - 5 minutes before the bell.
YOU HAVE UNTIL NOON SATURDAY TO EXERCISE! If the judgement is announced, you will want to exercise the appropriate contract (depending on the ruling) and also place an order to sell (or buy to cover, if puts) on Monday morning.
Make sure, in advance, how to get ahold of your broker either after-hours on Friday or on Saturday morning! Most make arrangements on expiration Friday to permit customers to exercise on a Saturday.
Find out, in advance, their funds policy on this situation. If your broker's policy is favorable, you won't need to have the cash to cover the exercise, as long as you place an order to close out the exercised position at the same time.
(This is normally the case on a normal exercise. However, be certain that they will let you do it at expiration, and if not, make sure you have sufficient funds in the account for exercise.)
If the decision is not announced, then you are out maybe 1/8. (You want to buy these CHEAP!)
(1) I wouldn't be surprised to see MSFT options relatively inflated at expiration from here until the ruling. (e.g. next 1 or 2 expirations).
(2) I wouldn't be surprised to see some brew-ha-ha at some point alleging the engineering of the timing of the decision for precisely this purpose... (Assuming it works out this way.)
My bet's on November expiration day for the decision. Just too convenient! |
