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.
May 8th, 2018 at 12:23 pm
Speaking of HMNY and adjustments. If we're not going to capitulate then we have to adjust:
In the OOP:
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.
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.