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Non-Tech : Kirk's Market Thoughts
COHR 197.65+2.5%Dec 10 3:59 PM EST
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To: Kirk © who wrote (1813)8/21/2014 3:45:51 PM
From: Jerome2 Recommendations

Recommended By
3bar
Kirk ©

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It appears that some folks are watching this thread for good investment ideas.

In post #1812 I suggested that Noble (NE) would be a good play with the Sept options at the 29 strike, because if that option was exercised you would have 100 shares of NE and 33 shares of PGN. (Paragon Offshore PLC)

At the time of my posting there were 0 options bought at that strike As of today there were 3870 contracts open plus 10 more today.

Here is where it gets a bit tricky....NE is trading at 27.90...... the option is at the 29 strike,

I got filled with 100 shares of NE at $28.50 a share ( under the 29 strike) plus 33 shares of PGN worth $316.00...

Now both NE and PGN are both far oversold ( fear of drillers I call it). Both companies pay very healthy dividends

NE 4.4% and PGN has an expected annual dividend of $1.00 per share for a 10.2% yield.

I think the value of PGN is not priced into the value of the option because the option has the same value when PGN was trading at 12.50 and at 9.70.

The only reason I'm aware of this is because I owned Noble and Noble options prior to the spinoff and I was trying to figure out how to deal with the odd number of Paragon shares I would end up with.
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