LHCG
LHC Group LLC
stock NASDAQ

ATVI was \~18 months play. Due to the pending merger ATVI had the smallest IV in S&P500 for almost a year. I play MA from 2 angles. When company waits for regulatory approvals and absent of negative catalyst it bounces in a slightly ascending range. There is probably a formula how market calculates arbitrage delta vs remaining time to close but more or less you can trade theta quite safely. Close to the approval I switch to shares and sell long dated calls near the merger price e.g. 2026 with most theta. This serves as extra profit as well as some consolation $ if merger falls apart. All cash merger options get accelerated to the next month expiration so longer dated calls becomes short dated after the merger. I don't play all merger only the ones that after research I am personally convinced would go through.
My successes so far: TWTR,ATVI,VMW,BKI,LHCG,PACW,TRTN,SGEN
Failures happen too: TGNA, FHN

ATVI was \~18 months play. Due to the pending merger ATVI had the smallest IV in S&P500 for almost a year. I play MA from 2 angles. When company waits for regulatory approvals and absent of negative catalyst it bounces in a slightly ascending range. There is probably a formula how market calculates arbitrage delta vs remaining time to close but more or less you can trade theta quite safely. Close to the approval I switch to shares and sell long dated calls near the merger price e.g. 2026 with most theta. This serves as extra profit as well as some consolation $ if merger falls apart. All cash merger options get accelerated to the next month expiration so longer dated calls becomes short dated after the merger. I don't play all merger only the ones that after research I am personally convinced would go through.
My successes so far: TWTR,ATVI,VMW,BKI,LHCG,PACW,TRTN,SGEN
Failures happen too: TGNA, FHN