And if I had all the hours back that I invested in the first BZ PC game as well as BZII, well, I’d not be eligible for membership in the AARP…

Fish Tank: “…about to tank….

Battlezone = tank game! (I hope you meant that!)

Sorry for the OT – bad news overload.

PeteMoran- Or is it an act of retrieving wealth that others are in the act of destroying anyway?
Do I take the Porsche that someone is throwing away or let it go to the junkyard?
They have already made the bad decision without my coersion.

An analytically sound approach to investment is very far from gambling.

I have strong concerns as a Christian that I do not involve myself in morally questionable behavior. I think it maybe an over simplified view (though I agree that greed, in and out of the market, is a major part of our countries problems) on your part.

Thank you for your concerns and for stating them in a very decent manner.

Regards always,

Bunter

Someone has $1.25 and rather than invest it into something job creating or productive, it’s gambled on one person having less perfect knowledge than another in their “holding” of a particular security.

There is absolutely nothing constructive or economically expansive about any of this.

People in the USA wonder why you have no manufacturing/innovative industry?????????????? China/India are way ahead of you.

You deserve to be a bankrupt Banana Republic.

I bought some June $2 puts today @ $1.25

I’m expecting the Lehman Bros example in the link supplied by nocaster to provide the template for GM (soon to be GM.PK, per prevailing wisdom), with me seeing a profit if GM.PK is below $.75 upon expiration.

One thing to watch out for is, for example, if you had $2 GM puts for May, and somehow exercised them such that you wound up with a short position in GM, you’d be liable for a margin call if shares of GM increased in value (as they’ve been doing) enough to warrant such an action from your brokerage.

Another thing to be aware of is that options aren’t as liquid as the underlying security (in my experience), so if you place a large market sell order (sell to close, in the case of put options) you might see the transaction price diverge from what market price was when you submitted the transaction.

Regards,

All in the money options must clear upon expiration. In the case of a put, when it exercises you have sold short 100 shares at the strike price. If the company is BK and shares are worthless, the broker will remove the worthless shares and you keep the proceeds of that short sale that resulted from the option exercising. The counter party to this transaction was the person who wrote the put contract. They were required to sell you the shares at the strike price.

Here’s a good link that explains better than me.

http://www.optiontradingpedia.com/what_happens_to_options_during_bankruptcy.htm

Proceeds? As in the increase in the put value?

I was thinking in terms of running a put slightly in-the-money and selling before things were terminal. Are you saying that the put will still have value after the BK?

Ok, think I get it, I pay $99 (or what ever) per contract to cover the contract and then sell at my strike price to the broker for my profit? This will still go after BK?

I can see the potential of puts in this situation but am not aware of the risks involved with them in a BK.
Really appreciate your advise. Thanks.

Bunter

Puts are the biggest gift in the event of a BK. Most likely the stock will sell of to about .01 and get moved to the pinks. Say you bought June 1 strike puts. If GM shares are worth .01 the put would have an intrinsic value of .99 per share, or $99 since each contract controls 100 shares. More than likely the puts won’t have any buyers so you just hold it until OpEx and let them exercise. At that point you would be short 100 shares for each put you owned. If the GM shares are worthless you just keep the proceeds and the broker will remove the short position.

I’m new at options trading, if (ok, when) GM goes BK what happens to a put you have out there? I’m thinking one would want to have a date driven sell order in the system. Say for the 27th?

Like you hint , a put is very tempting but I would want to protect myself from disaster.

I would welcome any thoughts.

Bunter

I think your better off investing in Mega-Million tickets. They’re a lot more fun and have better odds;)

“The next few days will be worrisome and frightening”

Who knew!

Hell I’ve been worried and frightened for the last few years!I think I will keep myself busy the next few days.Detail the cars, do a little fishing.I sure don’t want to be anymore worried and frightened than I already am.

I have the same question. If the trading volume was nothing, I could understand it..

No buyers would seem to lock the price in, but millions of shares are moving every day…

Makes no sense to me…