HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
OMARS and tracking option strategery
RS is tracking OMARS in the mid 50's.
MTC has it at 20.
This presents an interesting trading situation for the put and call options as it suggests quite a lot of potential volatility in the weekend take. Let's do a little math.
The strike price for OMARS.PU and OMARS.CA is $35. The current price for each is right around $3.
If you go long both, and OMARS takes in either under $29 or over $41, you come out ahead. It doesn't matter which tracking service is right (if either); you still win.
For example, say OMARS makes $42. The call option cashes out at $7 and the put is worthless. It cost you $6 to take the position, so that's $1 profit. If OMARS makes $28, the put is worth $7 and the call nothing, so you still make $1. The amount you make goes up by $1 for every $1 the weekend gross is beyond that range (29-41) since one of the options continues to go up in value but the other doesn't go down any more.
Naturally, if OMARS makes somewher inside the range of 29-41, you lose money on this transaction. Then you make a sad face and curse yourself for trying to be too clever.
OMARS and tracking option strategery Mar 05, 13:52
I see what you were saying now...thanks for explaining the ideology. {nm} Mar 05, 15:00
What is RS? and MTC? {nm} Mar 05, 18:08
Reel Source and Major Theatre Chain {nm} Mar 05, 18:53