Both Time Warner and Sprint saw unsuccessful completion of proposed mergers on Tuesday.? This information was bad news for many options traders.
Following the announcement of the merger withdrawals, Sprint saw the value of the two options with the highest ownership reduced to a penny each.? Also, five of the most owned Time Warner calls expiring in August or October fell more than 88%.
Tim Biggan, chief options strategist for Trading Block states, “Any time you see a big drop in share prices or mergers falling apart, calls that were trading before are worthless.”
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