Did we catch any fire from Cramer? Warrant sale succes?

[babaoriley]

And will we catch some from AF (and/or others) by tomorrow morning?

I was able to sell some of my warrants for $3.04 today (I had that order in from last night and just left it - just kept creeping up there and filled about 20 minutes before close, a little under 10,000 for those that might be curious); I am in 50/50 with my brother in law on a bunch of MNKDW (we've had other positions, too, but we are down to one position only now!).  Anyway, one way or another, we got out of balance in the account (ie, a margin call a while back that I needed to cover) and this was a way to get that "loan" back and even things out with him.  But rather than take the money out, put it back into another account and lose it in some other stock, I may propose we keep the cash in and use it to secure the sale of some $12 or $15 Jan 2015 calls.  The brokerage will not let us use just the warrants for collateral, unfortunately, so we need the cash.  We're more or less going for broke on that account, so I figure, what the heck.

[MnkdMainer (MM)]

Do you mean a covered call?

[babaoriley]

Yes, MM, those would be calls covered by warrants, not with stock. With a call covered by stock, you don't have to put up any additional collateral, but with a call covered by warrants, you do. I suppose I could argue and make a case about what the warrants are worth, etc., and I think I made a mild attempt in the past to get them not to require additional collateral, but they refused.

I would not sell uncovered calls on this stock; I do sell uncovered calls often, but this one would be way too dangerous! I found out a year ago that selling them on NFLX was way too dangerous, too!

[alcc]

I think if your warrants are (a) in the money and (b) expiration is beyond the covered calls you wrote, then it's deemed covered. Otherwise, considered naked.

[milachka63]

Out of curiosity, can't you easily replace the warrants with some roughly equivalent calls?

I'm not familiar with the exact characteristics of the warrant, so it might be a silly question. Also I suppose that such an operation would have some tax impact for you. I can just ignore that as in Belgium we don't have to pay capital gains taxes (only dividends are taxed).

[babaoriley]

Now that they are being traded bid and ask, I might try to do something like that, milachka.

By the way, here's what I did this morning, viewing this lovely drop as an opportunity, and I would love to get your (and anyone else's, of course) view on this: I bought Jan 2016, $7 strike calls, and sold Jan 2015, $15 calls, for a net debit of $1.75.