Not that this matters that much as I believe we will get big deal news prior to August options expiry. However, should we see any delays, it helps to see a rising max pain number which only provides further support for the share price.

There is a staggering 25 million in call option value just in the combined $75 to $87.50 strikes for August (this is only for one month IOC fans).

Now, ask yourself this question - should most of those options (say 2 million shares) get an early exercise with deal news, where will they come from? The float is pretty much locked down.

Amazing thing to me is still the Sept calls.  Starting at 75 and up through the 100s (an amazing 28,123 today) there are a total of 42,964 calls, which of course represents 4,296,400 shares; all right now out of the money.  Then in the money down to the 60s adds another 12,644; another 1.2 million shares.  I know one of our technical posters here told me the other day that this is a very unusual occurrence that has him excited.  What's your take on all of that tarules?

'tarulestheday' pid='7175' datel Wrote:

Not that this matters that much as I believe we will get big deal news prior to August options expiry. However, should we see any delays, it helps to see a rising max pain number which only provides further support for the share price.

There is a staggering 25 million in call option value just in the combined $75 to $87.50 strikes for August (this is only for one month IOC fans).

Now, ask yourself this question - should most of those options (say 2 million shares) get an early exercise with deal news, where will they come from? The float is pretty much locked down.

What is my take on over 4 million OTM call shares with approx 9 million short shares on a tightly held float of approx 40 million shares with pending news? I would use the following analogy: The stadium is currently filled with 40,000 fans and the game is underway. However, at least 13,000 additional fans will be frantically entering the stadium when the next touchdown is scored. Where will these fans sit? Answer, the ticket prices must rise a MINIMUM of 32% just to establish some sense of equilibrium of seating. This is just to satisfy seating volume mechanics and doesn't account for potentially explosive "deal" details which would make the currently seated fan base much more reluctant to give up their seats for a mere 32% increase in ticket prices.

'tarulestheday' pid='7175' datel Wrote:

Not that this matters that much as I believe we will get big deal news prior to August options expiry. However, should we see any delays, it helps to see a rising max pain number which only provides further support for the share price.

There is a staggering 25 million in call option value just in the combined $75 to $87.50 strikes for August (this is only for one month IOC fans).

Now, ask yourself this question - should most of those options (say 2 million shares) get an early exercise with deal news, where will they come from? The float is pretty much locked down.

They don't have to exercise them, but can just liquidate the calls at gains, right?  What you're pointing out about the float and exercising might be an incentive to exercise, unless still short, but they would have to pay full strike share prices.

'Getitrt2' pid='7470' datel Wrote:

They don't have to exercise them, but can just liquidate the calls at gains, right?  What you're pointing out about the float and exercising might be an incentive to exercise, unless still short, but they would have to pay full strike share prices.

Getit - correct, any call buyer can just sell the calls for gains. However, they always have the right to early exercise. Furthermore, the more they are in the money, the more likely they will be exercised early. With approx. 9 million shares short, I guarantee you that many of those 30,000 $100 calls are owned by the shorts as hedges. For them, it would be an easy transaction to exercise the ITM calls and cover the short in essentially the same transaction.