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Post by liane on Jul 11, 2014 10:36:59 GMT -5
Yeah, I don't know - never been in the situation before.
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Post by joeschmoe on Jul 11, 2014 11:23:28 GMT -5
Yeah, but then I'd have to execute all my leaps early to capture the divi... I believe that the strike price would be adjusted to account for the special dividend. Option holders are not compensated for normal dividends, but are compensated for special dividends. Sorry you are incorrect. The strike on the options are readjusted downwards by the price of the special dividend, so if the strike was $10 and the dividend $2 the new strike of your option is now $8. This doesn't really help option holders in any way whatsoever, it is actually extremely detrimental because the intrinsic value of the option remains constant, while the holder misses out on the cash payment. Source: Some people may know me from the old boards, I did a long long article on option investments in MNKD. Cheers
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Post by liane on Jul 11, 2014 11:34:22 GMT -5
Thanks joe,
So this confirms my belief that I would have to convert prior to the ex-dividend date.
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Post by papihoyos on Jul 11, 2014 13:00:06 GMT -5
On the announcement of a special dividend, I sure you would have ample time to excerize your option before xdividend date.
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Post by bobw on Jul 11, 2014 13:32:19 GMT -5
I believe that the strike price would be adjusted to account for the special dividend. Option holders are not compensated for normal dividends, but are compensated for special dividends. Sorry you are incorrect. The strike on the options are readjusted downwards by the price of the special dividend, so if the strike was $10 and the dividend $2 the new strike of your option is now $8. This doesn't really help option holders in any way whatsoever, it is actually extremely detrimental because the intrinsic value of the option remains constant, while the holder misses out on the cash payment. Source: Some people may know me from the old boards, I did a long long article on option investments in MNKD. Cheers Isn't that what I said: "the strike price would be adjusted to account for the special dividend".
And it absolutely helps the options holders to have an $8 strike instead of a $10 strike.
You do not have to exercise your options prior to the dividend payment to get compensated. If the option is in the money, exercise before and get the $2 dividend, or exercise after and get the get the stock $2 cheaper because the strike is $8. In this case the intrinsic value goes up by $2.
If the option is not in the money (assume the stock is at $9). Exercise before and get the stock for $10 less the $2 dividend is a total cost of $8. Exercise after and get the get the stock $2 cheaper for a strike of $8.
Assuming you exercise, it doesn't matter, in the money, out of the money, exercise before or after, the stock costs $8 after all adjustments.
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Post by mrhaigs on Jul 11, 2014 14:42:48 GMT -5
Thanks joe, So this confirms my belief that I would have to convert prior to the ex-dividend date. You wouldn't need to exercise it. You would just sell the option as it will move in according with the share price. If mnkd announces a 20$ dividend tomorrow. The share price will take that 20$ into account immediately therefore the underlying derivative, your options, would rise in value the same.
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Post by 4allthemarbles on Jul 11, 2014 15:54:26 GMT -5
Either way special dividend is a win. I don't know what the odds are, but stranger things have happened.
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Post by ezrasfund on Jul 12, 2014 17:39:39 GMT -5
If you want a dividend you can lend your shares. The shorts might need some more rope. Schwab is only only paying 6%, paid monthly, fully collateralized. At this point I figured it was time to earn a little lunch money. Let's see how long it lasts.
BTW I took a look at that Fail to Deliver list, and MNKD and even MNKDW show up with some pretty high numbers, while most entries are for a few hundred or thousanad shares.
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Post by 4allthemarbles on Jul 14, 2014 10:07:24 GMT -5
I think I remember Someone posting saying they are getting almost 11% loaning out shares. I want to say it was Ashiwi but I my be incorrect.
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Post by mannmade on Jul 14, 2014 11:59:26 GMT -5
I was offered 12% by my broker IB.
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Post by thekindaguyiyam on Jul 15, 2014 16:34:29 GMT -5
Why Investors Show Confidence tuesday, july 15th 2014 Some forecasted that MannKind Corporation (NASDAQ:MNKD) [Trend Analysis] faced the grim risk of striking out on winning authorization for Afrezza. Of the five firms reviewed up to now, Sanofi would come into view to be by far the best candidate to collaborate with MNKD in selling Afrezza. It has a strong attendance in the diabetes marketplace. Its sales force is well-known with the use of fast-acting insulins in addition to possibly with insulin pumping, which makes it probable they would be able to understand the sole benefits that the ultra-fast Afrezza proposes insulin users. Shares of MannKind Corporation (NASDAQ:MNKD) decreased -0.99% to the trading at $9.97. The firm has 52-week low range of $9.90 and 52-week high price was $10.18.The recommendation trends from street professionals are, stock rated at “buy” by 2 analysts, while no analyst rates as a “sell” security. www.emarketsdaily.com/biotech-stocks-under-new-concerns-achillion-pharmaceuticals-inc-nasdaqachn-mannkind-corporation-nasdaqmnkd-sarepta-therapeutics-inc-nasdaqsrpt/1813707/
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Post by babaoriley on Jul 15, 2014 18:08:12 GMT -5
"The firm has 52-week low range of $9.90 and 52-week high price was $10.18." Wow, sounds like an incredibly stable developmental biotech stock, I think I'll have to investigate further!
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Post by thekindaguyiyam on Jul 15, 2014 20:46:38 GMT -5
"The firm has 52-week low range of $9.90 and 52-week high price was $10.18." Wow, sounds like an incredibly stable developmental biotech stock, I think I'll have to investigate further! You may even want to invest in it. Don't consider that a pump. As far as the 52 week pricing… a direct quote; and we all know that few get it right.
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Post by mannmade on Jul 16, 2014 11:24:57 GMT -5
Doesn't anyone do their homework or proof their work anymore? Geez!!
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Post by otherottawaguy on Jul 16, 2014 15:04:43 GMT -5
Alrighty, got another fun one for you.
Let's say I have some $4 calls and the "special dividend" is $6, does that mean that I am entitle to 1.5 shares for $0.00?
What would the value of the company be without Afrezza if they sold this off and it was the source of the payout. Not saying this is the route, just wondering what the company would then be looking like from a valuation perspective. I know some will say additional licensing of Technosphere but this will be again, further down the road littered with the corpses of both longs and the original shorts. There would then be a whole batch of the shorts who survived pushing this around again.
OOG
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