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  1. phil

    Speaking of HMNY and adjustments.  If we're not going to capitulate then we have to adjust:

    In the OOP:

    Long Call 2020 17-JAN 2.50 CALL [HMNY @ $1.57 $-0.54] 25 2/13/2018 (619) $7,750 $3.10 $-2.88 n/a     $0.23 $-0.33 $-7,188 -92.7% $563
    Short Call 2020 17-JAN 7.50 CALL [HMNY @ $1.57 $-0.54] -25 2/13/2018 (619) $-2,625 $1.05 $-0.95     $0.10 $-0.10 $2,375 90.5% $-250
    Short Put 2020 17-JAN 5.00 PUT [HMNY @ $1.57 $-0.54] -15 2/13/2018 (619) $-3,900 $2.60 $1.30     $3.90 $0.21 $-1,950 -50.0% $-5,850
    • We're in for net $1,225 and the 15 2020 $5 puts at $3.90 ($5,850) can be rolled to 35 2020 $2.50 puts at $1.60 ($5,600) for net $250 and very little additional commitment to own the stock.  
    • The 2020 $2.50 calls @ 0.28 can be rolled to the 2020 $1 calls at 0.58 for 0.30 – that's a no-brainer for net $750
    • We can buy back the short $7.50 calls for 0.10 ($250) and we'll wait and see if we get a bounce.  We could sell the $5s to pay for more of the roll if we want to but, for 0.28, I'd rather take the chance of getting a better price.  

    In the LTP, we will make the same roll with our 50 $2.50 calls and we have no short calls.  We will also roll our 20 short 2020 $7.50 puts ($6.10) to 50 short $2.50 puts at $1.65, which is effectively $4.12 – we don't want to over-commit, so we'll take the small loss for now.

    Dilluted/Albo – We expected that to happen from day one.  This is just that shoe dropping.  

    LB/JMD – That is NOT how you lay out a position (see above).  Anyway, given very little information, I'd just roll the Jan $32.50 calls ($4.50) to the 2020 $30 calls ($6.90) for net $2.50 and you're getting the extra year for free.  The put target is fine and, when they start to recover, you can begin selling 10 (1/4) of the shorter-term calls.  Even now, June $35s are $1.35 so $1,350 for 38 days out of 619 you have to sell means you can collect over a dozen of those short sales for $16,200 while you wait.  

    As usual, the question is, why would you not be selling a few short calls almost all the time?

    HMNY/Lala – Yes, VZ owns 10% and will likely buy more.  People act as if VZ can't read books or maybe that they delivered a real asset (MoviePhone) in exchange for stock and warrants in something that is likely to implode the next Q – Because they are that stupid, I guess…  Also, HMNY themselves just spent their cash doubling up their ownership stake in MoviePass.  If anything, I think they may just be using this to play hardball with debt holders to restructure (Trump does that all the time).

    Iran/StJ – I think it's totally baked in at $70 and we'll see $65 if it turns out we're working something out with Iran.  

    Oil/Den – I agree.  Trump wants the Nobel Prize he needs to be diplomatic.  

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Zero Hedge

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