Peter: I don't put much stock (no pun intendd) in broker's advice. I have shorted stocks that have had all strong buy recommendations from the major brokerage houses only to see them crash after bad news or disappointing earnings. Look @ RMDY yesterday and check the Zaks ratings and you'll see what I mean. Investors are wary because of all the delays. On the other hand, no stock should ever ruin your life and nothing is a sure thing. I lost a ton of money last year at this time in a ZITL short squeeze so I understand your angst. I was right about the stock (then 70, now 10) but didn't want to chance losing everything. On the other hand, your loss will be limited to the downside which I believe will be 11 or 12 if the deal falls through. If you buy put options if gives you the right to sell the stock at a certain price. If the stock goes up, they will lose value-down and they gain. You can sell the options or convert them. Right now January 17.5 puts are bid 2 7/8, ask 3 1/4 symbol CXQMW. February are 3 1/8, 3 1/2 symbol CXQNW. In other words it would cost you about $9000 for 30 contracts of CXQMW. Essentially, this would lock in today's price for you. If a merger announcement was made, the value of the options would be 1/4 or a 1/2 until people were positive then eventually nothing. Or you could hedge half your position.
FWIW my stake is 1600 shares and I'm not sweating it. I don't have a huge portfolio, so if the deal doesn't go through it will smart but its not the end of the world. 1/2 the people in the world live in dirt floor shacks with no running water. Christmas is a good time to be thankful for what we have. Sorry for the lecture, but you need to get some perspective on this. E-mail me if you have questions (see my SI profile).
Happy holidays,
Timoteo
|
