By: The Shiny Thing
Not really. In fact, given that it's pretty much guaranteed to be exercised, the premium for the $5 call pretty much has to be $5 - maybe $4.97, to take into account the interest. It's not especially...
View ArticleBy: Mid
Sort of related: is there anything fishy if A sells the shares to B at $10, and takes a call back from B for a $5 premium and a $5 strike?
View ArticleBy: The Shiny Thing
Mr. President Dr. Steve Elvis America: yeah, a stock loan would be a lot easier. However, the options contract is just as legally enforcible as the stock loan agreement - it'd probably be regulated by...
View ArticleBy: The Shiny Thing
IANAEquityOptionsTrader, so there may be some details of the crossing mechanisms that I've got wrong, but... While they might use the exchange's crossing mechanisms to make delivery of the shares, it...
View ArticleBy: Ironmouth
These transactions are done via stock lending in the real world. The method you suggest isn't used for the complications you indicated.
View ArticleBy: Mr. President Dr. Steve Elvis America
It's quite possible for an individual to sell shares of publicly-traded stock to another specific individual at any price the two of them please. The buyer and seller's brokers would probably have to...
View ArticleBy: crocomancer
I'm not sure I understand the structure here exactly: does A sell B the shares, then B writes a call which he sells to A so A can exercise it to get the shares back? Because you say both that B writes...
View ArticleBy: TrashyRambo
They could do this privately. (In the same way as I could sell you my TV with an option to buy it back.) So no one would see anything. If they wanted to use regular purchases: A would have to sell his...
View ArticleQuestion: Options Trading Question
Technical options trading question. I need to understand the mechanics of a particular options trade a little better. Let's say A wants to temporarily transfer his shares of IBM to B, but wants to be...
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