Jill- wow. Thanks for your reply. This will keep my mind occupied for the rest of the afternoon. Magnificent problems to have but still,the butterflies are churning in me stomach(!)
<"Greater liquidity and rush to sell means MMs can determine the price, separate from the underlying, and you might lose out on some cash if you get caught by that...">
To clarify- are you saying that with the added liquidity the split will bring to the options, the MM's will be able price the options any way they want- to disconnect the price of the options from the price of the stock? It seems the MM's can manipulate the time value portion of the option however they want, but the value of the option can't fall below parity w/ the stock (or can it? I've got my McMillan's here- will consult it- real world seems disconnected from texts, though..) Sell "immediately" sounds like he's expecting some post split softness (he used to say this)- does he really think there will be a "stampede to sell", and if so, when? This has implications beyond the Jan. 400's, does it not? or, is this advice limited to options expiring in Jan.? I have Febs., Aprils, Leaps, etc...(and yes, I'm dancing in the streets!)
(Please give my best to Voltaire- I've him to thank for these Jan. 400's!!) |
