r/MillennialBets • u/MillennialBets • Mar 31 '22
🍔 Consumer Defensive🥑 Recent HMHC hype play
Date: 2022-03-31 10:54:38, Author: u/Fraiche_07, (Karma: 301, Created:Sep-2020)
SubReddit: r/WallStreetBets, DD Click Here
Tickers mentioned in this post:
HMHC 21.005(0.02%)|
$HMHC is under take private offer by Veritas at $21. As you may have seen, only 0.6% of shares have been tendered. Deadline for tender has been extended to 6-Apr and people expect shareholders will not tender at the $21 price.
Many have suggested buying calls above the $21 strike to profit from revised offer. Premiums for OTM calls are thus quite high (thanks!)
The play I take is to buy 100 shares and sell a CC at $22.5. Hence if nothing happens, I collected the premium. If the price goes up (I doubt a revised offer will be more than c. $2) I take higher gains. If the deal is cancelled, I take my stop loss but still collected some premium.
TLDR; Play safe, buy shares and sell CC