|
Post by contrastock on Feb 27, 2018 23:43:23 GMT -5
Dave will have to purchase the stock option at 2.76 to exercise it. The 500k goes to Mannkind and the difference goes to Dave. Hopefully the price will increase substantially and he will be rewarded If one has the choice, one never exercises an American call early (at least not if the stock is not paying a dividend). The optimal trade is to simply sell the call. Is Kendall allowed to sell? Assuming so, his options already have (according to a quick Black-Scholes-Merton calculation) a value of about $2 each. It looks like the earliest he can exercise the options is 2/12/2019 (1 year from when the value was calculated). I don't think he can sell the options (only exercise them).
|
|