InterDigital Inc (IDCC)

[Ellix]

sonetirot...

I don't know your goal for this short period. But your math is all wrong because you did not figure out the original cost of the option. Besides with $19K you can buy a fistful of options, perhaps as many as 80 contracts which is equivalent to 8000 shares working for you. They all convert to money ($) at some point in time and you can do whatever you want with it, including buying more shares.

If you look at it from the possibility that you can also lose the arb, then losing the equivalent of 1000 shares is much better than having bought 8000 shares (the equivalent of 80 contracts) and losing half of it value or more because of the hit. Your upside, however, is almost the same.


re:
"I had that June 17.50 Call. It is much cheaper to close out and buy shares.
Assume exercise 10 contracts to get 1,000 shares, you pay $17,500 (not include commission)

Close out option get $2400 buy 1000 shares now cost $18,870
Total cost $18,870 less $2400 = $16,470

That is $1,000 different."