re: i'm in... Sirbernie...I noticed the arbitrage in the options...

re: i'm in... Sirbernie...

I noticed the arbitrage in the options myself...so decided to get on board!

At one stage, I found myself having a bit of a pissing competition with the guy selling...with tit-for-tat buying and selling back-to-back...but I eventually won out!

I think...LOL!

You see this sometimes; someone, for whatever reason, suddenly needs out and is prepared to dump at almost any price. Invariably, the shares usually recover just as soon as they have finished.

It didn't appear to be wholesale selling either, rather just one persistant person, so I thought it might be safe to see how deep his pockets were...and take him on!

I only hope he doesn't know something that I don't...LOL???

I really find it hard to see the downside of an in-the-money option, trading at such a discount...in fact, they are currently trading at pre-merger announcement prices???

Assuming a worst case scenario, I really can't see CTI getting away with a 50:1 script offer...which is the level needed to value DFT's shares at about 1.6c, (options .006), given CTI's close today of 78c.

Prior to the merger announcement, DFT's shares had found a floor around this level anyway, so one would expect that any offer would have to...at the very least...be a at a premium to this!

If all goes well, DFT will ultimately become CTI now, so I guess it may pay to keep an eye on them...which, by the way, were up today and had a 200K buyer "at market" on the close, which is big for these guys...so obviously someone likes the deal.

Come to think of it, I wonder if the strange trading patterns in both partners can be put down to some kind of pre-merger related balancing act?

As I see it, a higher price for CTI versus a lower price for DFT shares, would obviously make any script swap far more attractive to CTI...and if the ratio was low enough, also attractive to DFT share holders.

I have noticed that over the last few days, strangely enough the DFT shares were often being lead by activity in the options...rather than the other way around!

Perhaps today's kamakaze seller was simply attempting to kill sentiment in the FPO's???

If so...I don't think it worked.

Anyway, I'm set at .006 and fairly happy about that!


As I see it...

FA...

DFT; A top 10 ISP, profitable, growing, have cash in the bank and are currently in merger (friendly takeover) talks...though they obviously have capital problems.

CTI; Also a top 10 ISP, profitable, growing, have cash in the bank...and even after the merger, still wont have capital problems.

TA...

DFT; Charts suggest little interest in selling below 2c now, with 2 consecutive days of reducing volumes below this level on the retrace. Given the current premium to recent trading levels, there has been surprisingly few sellers. In my opinion, there is a better than 50/50 chance of another upward run for DFT in next few days.

CTI; Previously illiquid market, obvioulsy bouyed buy the possible merger. Chart suggests new highs in comming days, though with so few shares available on market, the upward momentum may well stall. The expanded shareholder base of the merged entitiy should ultimately prove beneficial to CTI's liquidity.

Cheers!