Minutes for Diamond Lake Investment Club March 27, 2008
There are two basic ways to play these options. One is to short the options and the other one is to
purchase buy-write positions. Let us consider the buy-write options first.
Since the implied volatility of the BSC options is currently very high, one can enter into a long-term
buy-write position with anticipation that the volatility will decrease substantially after JPM acquires
BSC. At that time, the position may be unwound at much lower call prices.
Bear Stearns Options
Actual transactions on Next Page.
There are two basic ways to play these options. One is to short the options and the other one is to
purchase buy-write positions. Let us consider the buy-write options first.
Since the implied volatility of the BSC options is currently very high, one can enter into a long-term
buy-write position with anticipation that the volatility will decrease substantially after JPM acquires
BSC. At that time, the position may be unwound at much lower call prices.
Bear Stearns Options
Actual transactions on Next Page.
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