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Playing & Trading Strategy

Correction to B

Posted by: Buy StarBond Fund 18 (a.k.a mrbinns) on Jun 17, 08:40 in response to Buy StarBond Fund 18's post Every securtity delisting follows the same rules...

B ) If the Strike was 20 and the actual was 19, then the call delists at zero

 If it delist below strike, and you are short, you gain the difference between price paid and the delist.  If you shorted at 2 and it delists at zero, you gained H$2 per share.  Once again, this is different than the affect on your total portfolio, as you were already charged the H$2 that you paid.  Thus, in this scenario, your portfolio would reflect a gain of H$3 per share, the H$2 profit, plus the H$2 that you paid to short the security in the first place.

In my original response, B) was the answer if the strike was 20 and the actual was 21 where the call would delist at 1.





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