Microsoft's $100,000 Gift! 🎁Making opportunity in Blizzard's Acquisition

Last January, Microsoft plan to acquire $动视暴雪(ATVI)$ . Since then, I have been gradually engaging in options trading for Blizzard.

The acquisition price was $95. My main strategy was to sell put options. Due to market downturn and various policy obstacles in the US and Europe, Blizzard's stock price once dropped to around $70.

My sold put options were exercised, and I took over the underlying stock, which resulted in some losses for a while. Eventually, I managed to profit by selling covered call options on the stock when its price reached $80 and $85.

Yesterday, I reviewed my profit from ATVI, which consisted of the options and the stock. The total amount was approximately $100,000.

Although Blizzard wasn't the most profitable stock in my positions, but it provided a sense of security. Certainty was particularly important amidst the volatility of the past year.

Last night, I saw that the stock price surged to $87 following the approval of the acquisition by the Supreme Court. I took a few minutes to confirm the news and details. Then, I placed sell put orders at $80.

At the time, the premium for the put options was declining rapidly, so I explored different expiry dates between July 28th and August 18th to find the most favorable return.

As the stock price continued to rise to $90, I adjusted the strike price for the put options to $85. This meant that even the stock price dropped to $85, I would acquire the stock. However, my account had enough funds to cover the acquisition.

I believed the case have such a high level of certainty, I was willing to acquire the underlying stock at $85 in exchange for a $10 assured profit.

To summarize, my primary focus for selling put options was on July 21st, July 28th, and August 18th, at strike prices of $80 and $85.

Just now, I checked the premiums for these options, and they are still viable for selling put options. If the CPI tonight causes a drop below $90, I will continue to sell put options.

Last night, Blizzard's stock price briefly rose to $92. I shifted my focus to exploring sell call opportunities, and the $95 call options were active. Since the acquisition price was $95, theoretically, selling call options above $95 would be a guaranteed win.

This is Microsoft's largest acquisition to date; the initial offer was already at a significant premium. I don’t think the price would increase.

However, the premiums were around 0.1x for call options with strike prices above $95, making it not worth pursuing.

So, I placed sell call orders at $95 for both July 28th and August 18th. The main reason was that the premiums were relatively reasonable, ranging from 0.4 to 0.5. if the stock price rose above $95, the underlying stock would be called away involuntarily. But it was entirely unreasonable for the acquisition price to be surpassed by the rising stock price. If that were to happen, shorting the stock at $95 and closing the position at the acquisition price of $95 would result in no profit or loss. The only loss would be the interest on the borrowed shares for short selling (currently at 3.25%).

Last thanks$Microsoft (MSFT) $..