Potash Corp. of Saskatchewan, Inc. (NYSE: POT) seems to be trading as though another bid is headed its way. After a $38 billion offer from BHP Billion (NYSE: BHP) valuing the company at $130 per share, Potash has said that the bid will have to be far higher in its rejection. Potash went as far as to adopt an anti-takeover defense with a shareholder rights plan with a 20% trigger.
Friday was the first time in a while that private equity made a large acquisition in the power generation market. The Blackstone Group (NYSE: BX) announced that it was acquiring Dynegy Corp. (NYSE: DYN). The $542 million buyout valued Dynegy at $4.50 per share. It looks like at least some investors believe that there is a chance of a higher bid.
On August 4, Reuters reported that Warren Buffett could "get in a bind" over options because of new provisions in the Dodd-Frank financial reform bill.Over the past few years, Buffett's Berkshire Hathaway (BRK/B) has sold options for various worldwide stock indices worth billions of dollars without posting collateral. Does the Dodd-Frank bill now require the company to post collateral? Berkshire doesn't believe so
It seems investors are remaining concerned about share prices in technology stocks. After two private brokerage research reports brought caution around Intel Corp. (NASDAQ: INTC) this week over order slowing, some investors are looking for more downside protection
To say that Tuesday’s trading in Netflix, Inc. (NASDAQ: NFLX) was unusual would be an understatement. The company announced a new pact for films from EPIX, a Paramount and Lionsgate venture, that will give it faster access to new and hot movie titles for its online streaming service.
Although calls and puts are not insurance products per se, they can be used to protect or hedge an investment, much like insurance policies protect an asset. Brad Zigler of HardAssetsInvestors posted an article on the "price of gold insurance" as measured by the options market.
Hewlett-Packard Company (NYSE: HPQ) finds itself in an unusual place at an unusual time. The direction of the stock price may not exactly be a coin toss, but the case for up and down can be argued either way.
Procter & Gamble (NYSE: PG) is one of the world's largest companies with a market cap of $175 billion. P&G stock traditionally has low price volatility and is classified as a defensive stock. The issue this past week was that the company got bashed after its earnings report. Advertising, slow growth, high promotions, and even private label sales of consumer products were all part of the issues that caused earnings pressure.
When you have a profitable position in a stock you bought, you can often lock in most of those profits, while still taking advantage of further upside price movement.How? Simply replace your stock with a call option
Kinross Gold Corporation (NYSE: KGC) appears to be an example where options traders may be expecting something different than what equity traders are seeing. Kinross is paying some $7.1 billion in total transaction value to acquire Red Back Mining Inc. in Canada. A gold miner wants to become a much larger gold miner. As you often see with acquirers, Kinross saw a large drop in its common stock based upon the added dilution
Pfizer Inc. (NYSE: PFE) is seeing a very early expiration roll so far in August, right ahead of earnings. The stock is generally one of the less volatile out there. The pharmaceutical giant is a member of the Dow Jones Industrial Average and is a well-known global brand. After the Wyeth acquisition it became even larger. The stock has been bound since the end of 2008 in a $15.00 to $20.00 price range, except during the peak of the selling (and immediate aftermath) of early 2009.
Trading options has many uses: speculation, income, protection, and on. The current merger speculation around Genzyme Corporation (NASDAQ: GENZ) is an example where investors and speculators can take some refuge by buying some protection. If a buyout from Sanofi-Aventis (NYSE: SNY) does not occur, or if any other merger problems arise, the put options in Genzyme should offer at least some defense.