Microsoft - Yahoo Trade a Bust
May 22nd, 2008 by Shaun Carter
The Microsoft - Yahoo options strangle I entered into didn’t pan out the way I was expecting. Several factors led to the losses, including the continued rumor and conjecture surrounding the deal and the fact that there is still no closure from either side. The trade appeared to be moving toward profitability just before Carl Icahn decided to step up to the microphone and throw the whole thing into a tailspin.
I’m still holding out hope for Microsoft to rebound through the next several weeks and have strengthened my call option positions at different strike prices to capitalize on either a short-term tech rally or the final realization to traders that Microsoft is not going to go through with a Yahoo! deal and bring the shares back to a fair market value.
Technorati Tags: microsoft, yahoo, shaun carter, options, merger, carl icahn, jerry yang, steve ballmer, bill gates
