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It was spread across many bars and golf locker rooms. First ballot.
vegas.... a trade like this is used for purpose of leverage.....think about it....you can control a million shares and generate a positive cash balance....but you still need to have a large marginable portfolio to back up the margin requirements of being a put seller ..which are substantial....its definitely a hedge fund type trade....if you're the dealer your main thing is the financing rates along with the time decay and the underlying volatility...and thats all baked into the spread between the current price of the stock ...and what was paid synthetically .my guess is the dealer is now clear or fully hedged.....most likely he had a working order....as it was done in pieces and at different strikes.... the risk now lies with the put seller...because he is long the stock...fancy shooting....thanks for pointing it out to the crowd
dave...im still using that line when im breaking chops
just wanted to be sure that you knew....those shares had to come from somewhere...if i was the trader at the options firm....my most direct hedge to to buy the shares from someone....there easily could have been a million share seller out there right before the tender
My, we go back a long time. My wife is reading the posts to me while my eyes are healing and I broke out laughing when you mentioned your son. I recalled a post by you to another Irish poster when you said you lined the kids up every night to smack them around because they were 1/8th Irish. That was a first ballot Hall of Fame funny reply.
teecee56, of course the other side of he trade has to cover themselves, but up to this point it has not shown up in options. They could already have a long and want to exit the position. It's current effect could be IDCC's increased volume.
jealmc79, There is a month to expiration. Anything can happen between now and then. The stock could be $90 so you need the calls. The stock could be $70 so you need the puts. Yes one side is going to expire worthless. It is also known that it will cost them $74.3M. Whoever it is has very deep pockets. Now to possibly confuse you even more if there is a special dividend that goes X between now and then the options will decrease by that amount.
Paullee do you recall the UK patent where the judge ruled the patent would have been infringed if he did deem the patent invalid.
Is this the patent that was just reinstated and found to be valid by the UK appeals court?
Thanks.
vegas....one thing....you cant create synthetic shares on an options trade....and not have it effect the market....by selling the deep in the money puts....that effectively buys the shares from the market.for the put seller...the calls are a minor part of the trade being deep out of the money..although the dealer is also short those calls....so the dealer taking the other side of the trade...is not going to stay short shares and calls of idcc just because somebody wanted to buy idcc stock....most likely the dealer will hedge by buying other idcc options and shares to hedge his short position in idcc.... the flow definitely finds its way to the market in one way or the other....i know how this stuff works...my son works for the aforementioned options firm as a sales trader
“ 1 side becomes worthless”
I’m not asking you to quit reporting the options. I know how options work. It’s just that when they are used in this combination, if you run the numbers, it just doesn’t make a lot of sense for at least one side in this transaction.
As for me, please continue with the options discussion. EOM
jealmc79, I think that you do not realize that always in this type of trade 1 side becomes worthless. I will use the strike price of 80. If the stock closes below 80 in theory you will get your M shares put to you. If it closes above 80 you will call them away from someone. Now you may ask why. Let's say the stock is $75 why would you pay $80 on the call side when you are getting M shares being put to you. You might buy more shares at $75, but no one is going to pay $5 a share over market. I hope that this makes sense to you. Should you want I will stop reporting option plays.
dont overthink it...vegas is correct...somebody has taken several synthetic solutions to buying shares for one reason or maybe two or three for all we know..pros have accommodated their action [think fan duel]....all i know is...WE'RE IN PLAY!!!
“There are no dividends involved in this case. when you enact your options if they do not have the shares available will be short. The reason that this is done is to buy 1M shares without moving the market.”
There are 2 sides to each transaction so there are actually 2M shares in play here. To guarantee you get the 1M shares you would use the call you bought to get them. Then you could also be on the hook to come up with the cash to pay for 1M shares because of the put you sold. So essentially it would be 2M shares @ $79.65/share. Don’t know why anyone would be taking up this kind of position unless it was a prelude to a takeover.
The other side would have got the dividends on 2M shares, if any dividends were involved, and they weren’t short the stock. I don’t know if any of the transaction took place before the ex-dividend date or not. I haven’t even begun to figure out this side of the transaction or how they would make any money if they are short the stock or not.
jeal....the entity that took the other side of the options trade....is most likely a professional options dealer like Susquehanna.....in the end....the trade is all about the financing and risk management behind the trade... which a dealer can do do better than anyone else
jealmc79, Even if it is B of A, unless it is a fund selling off their IDCC ( not likely as not many have 1M shares as V, F and B are ETFs and can not sell unless to balance) it will just move their short to the new party.
jealmc79, when you sell an 85 put you only get the put money , You are liable for the $85 to the person that sold you the puts. The person selling the call does not have to have the stock available as most calls expire worthless. .The reason someone does this is they now know that whatever happens they are buying 1M shares at $74.30 per share. There are no dividends involved in this case. when you enact your options if they do not have the shares available will be short. The reason that this is done is to buy 1M shares without moving the market.
Maybe BOA is the one that sold the short position in this deal. That would explain a lot.
“Since it is now over 1M synthetic shares”
I don’t see how synthetic shares make much if any sense. If you sell an $85 put you have to have the $85 in your account or margin in case the stock is put to you and the person selling the call would have to have the stock available in case he got called out. I don’t see where there is any leverage in either case. Either way you are putting up $74.30 in cash or stock to cover your position in the end. Maybe I’m missing something here but I don’t know what it is even if margin is used it gong to cost you. The person selling the calls would at least get to collect any dividends in the meantime. The person selling the puts doesn’t seem to get anything.
Thought we would end up closer to $75.00
We can only hope. We won’t have to wait long to know the answer.
Task 1, they would pick the 85 because you get paid a lot more for the puts. The calls cost 20 cents but the puts are $10.90. On 100K shares they got paid $1,090,000 and had to pay $20,000 for the calls netting them $1,070,000. Of course on March 17, to enact it they owe $8,500,000. So it costs them $7,430,000 or $74.30 per share and they have 100K shares. Since it is now over 1M synthetic shares, I hope that it is a new entity starting a new position.
Thanks Vegas for the quick response. I always enjoy when you post since you’re so knowledgeable. Is the 85 strike price in such a short period of time a good harbinger or not necessarily?
Task1, if you buy the calls and sell the puts at the same strike price in the same size you have effectively created synthetic shares. The only caveats being on expiration day the share price ends exactly on the strike price or whoever you sold the puts to refuses to put the stock to you ( in which case you keep the money for the puts).
What exactly does that mean Vegas? I’m a long, long term holder but not that well versed in the options market. Thanks in advance.
A new 125,000 synthetic shares were just created on the March 85's
Vegas, think video. Also, recall CDMA went to them in mid-90s. They did look at us again with 4G and 5G patents but were able to work around. I don’t know if our 6 G work has drawn their attention or our video applications. Something has attracted them, imo.
They have now made approx. 800,000 synthetic shares on the March 80's and 100,000 synthetic shares on the 85's. Love to see that they are moving their short to a new player.
Monterey2000, I do not understand how Q is a suitor. They have licenses with everyone for mobile phones. So if they buy IDCC they would not be able to charge 1 cent more for the new patents. I believe it would have to someone that is not in the cell phone patent market. It could be an OEM that is interested in cross licensing.
Agree, I was just thinking based on vegas options post saying the conv notes were hedged to $125 and with Q being a possible suitor. I would include Apple as a possibility given its desire to replace the Q chip with one of its own.
Monterey, who knows? The forthcoming court decisions and the mandated arbitration decisions could change value on everything. I don’t project details or expectations. I live in a day tight compartment. I plan, but I don’t live in the plan until it is here.
I just exercised 130 of my March 52 1/2 calls and I still own more than 50% of open interest. Someone just got a good morning.
I remember the Cicso guy. That was a long time ago. Agree, still a possibility, although I'm still feeling Q. Thought it would have happened by now, though. Possible that the deal is done with specific price parameters in place based on stock price or specific event outcomes? I love a unifying theory of everything. LOL
Would an IDCC 1:1 stock merger with QCOM that would come with Q's $3 annual dividend be acceptable? I am thinking yes.
I don’t remember that but I agree with you it is feasible, especially after their recent financial surprise report. However, imo, Q is heavily invested as demonstrated by the transfers from Q to IDCC. I have found these kinds of moves are the final steps upon which evaluation results either move to buy-out or let it pass.
If it is determined by Q to be of future value, and Cisco makes a move, we’ll see a bidding event. We gave Q CDMA which enabled them to become the power they are today ( and enabled IDCC to survive). I am of the opinion Q May now want the whole package.
rich...i forget who he was....but there was always a guy who said that the eventual buyer of idc would be cisco...if you think about it,,,it makes some sense....the "wireless network" at this point....really has become a network within the total network...with data connections being passed back and forth between fixed and mobile networks seamlessly...
Does this make sense?
Average daily volume the last 10 days, 528,420 shares.
20 days x 528,420 = 10,568,400 shares traded.
15 % of 10,568,400 shares traded = 1,585,260 shares tendered.
How many patent trials does Lenovo have to lose before they settle with IDCC. Unless they think a court established FRAND rate will be more favorable to them.
With infringement dating back to 2009 maybe that is why they are willing to continue tossing the dice. I assume a sizable amount of money is in play. Still there comes a time to stop gambling and go with a sure thing.
TCit is time for something to happen that Increases the price by by a multiple of (X) times “pi”.
This is what TD AMERITRADE is showing right now:
Postmarket
Last Trade $75.00
Change Since Close 0.64 (0.86%)
Bid 72.93
Ask 76.81
B/A Size 100x100
February 16, 2023 5:19pm ET
BuySell
Closing Price $74.36
Day's Change -0.165 (-0.22%)
Bid close 57.47
Ask close 91.47
B/A Size 100x100
Day's High 74.74
Day's Low 74.05
Volume(Heavy Day) 949,444
February 16, 2023 4:00pm ET
Q yes, too many former in the fold. Cisco would be a surprise to me.
after hours quote now at the strike 75...is there anybody that tendered....has heard anything?
rich....i think the trail leads back to qcom or csco...always has....good luck my fellow warriors!!!
IMO opinion, that BOA analyst is merely a puppet for a greater interest in BOA. I have a position in IDCC and 3 times during this auction period they contacted me to discuss the auction and suggested discussion on this opportunity. I never responded. There is more to this BOA on stage action and I hope it will be revealed, soon.
leon....i know i make fun w/ the 5 o clock charlie MASH reference...but go back to the last time i referenced him...was just before the tender was announced...i do not pretend to be him or to know him....but when he has shown up for the last 15 years....SHIT HAS HAPPENED!!!!....
Then again someone may be trying to close out a short position. By the way I would never do business with certain banks.
TC, I like 5 o’clock Charlie. Maybe they will raise the auction price again.
why we up 2.5 pts in after hrs?...5 o clock charlie again!!!!
A new high despite the BofA analyst doubling down on his wrong analysis and thus attempting to add a plastic turd to the party punch bowl.
A evection job for the bouncers!!
Tomcat
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