I bought puts on Tiffany as I felt like the stock was buoyed by the news of the LVMH acquisition bid last year. It did not seem to be hugely affected by the Covid virus and the potential upcoming economic slowdown implications.
With April's non-farm job numbers going to reflect rising unemployment numbers. Corporate and consumer debt also catching up. This perfect storm will be wrapped by the disappearance of China tourist spends on Luxury goods.
I believe Tiffany's stock price will be pushed to better reflect the current and future situation and have bought 130 ITM puts at 11.62 that will expire on 15 May 2020. Implied Volume of +32% (Seems like a good price)
Trade closed: stop reached
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Took an L here for some reason the price held up so well and so un-naturally. I'm not so sure, if anyone knows why please share.
I just came across this after google search, I had the same idea because I saw some short seller activists discussing this on Twitter about 2 weeks ago.. I also have May 15 expiration puts they are worth more now but I am getting worried of running out of time Do you think there’s a gonna be any large moves here in the next few weeks or is this going to have to be till after October when they decided to re-examine the merger after
Ronin_trader
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@xbtspender, I hope there's a large move. But personally I can't see why there would be. TIF just seems very resilient to everything haha. I'm deep red in this trade so at this stage I can only let it run it's course. If you can exit with some profit, why not haha
crispisauz
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Nevermind, thought the price was lower. I wouldn't touch them. The only moves are from insiders selling or funds rebalancing (TIF is in SPX).
Better to just bet on the index instead.
Ronin_trader
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@crispisauz, hi could you tell me how you know that the moves are from Insider selling or funds rebalancing? The price movement was so unnatural, thanks!
greencru
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Are you not worried those puts will be worthless when LVMH completes their $135 acquisition, possibly sometime soon?
Ronin_trader
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@greencru, of course I am. I'm just betting that with the current instability and declining business. It will be tough for LVMH to push for a $135 per share acquisition which was valued during the bull period in Q4 last year. My option contracts also expire 15 May so I think I should be pretty safe from that scenario. Wish me luck!