Melt-Up vs Short Squeeze...

[johnwgrant]

I must say that I am surprised that after 2 1/2 months of waiting ....   we are still waiting !!!

That being said, and given that the probabilities are near 100% of a sell-down in the near future....   It would not surprise me at all if we see a "melt-up" to get IOC to nearer fair market value BEFORE that actual announcement happens.

In other words, the Short Squeeze may never materialize in the dramatic fashion that we would all love to see.  We could just experience a run of several weeks where the stock goes up a couple of bucks a day (with a few days of sideways consolidation) and then the announcement comes.

I am not predicting this ('cause I am inevitably wrong when I predict the future.  IE:  I have predicted 10 of the last IOC deals ... and they have only done 2 or 3 !!!) -- but I raise it as a possibility.

[admin]

I have a feeling we're already in the midst of it, John. But perhaps that's just me

[Movieguy]

Many people have been predicting a steady rise lasting for 2-3 weeks into the deal announcement. It's been predicted for many months, but maybe we are finally in it, which would put the deal at about the end of this month. Regardless of its accuracy, this idea comforts me, so I'm sticking with it through May.

[admin]

It could also be a bit of a Paulson effect, and the general theme of big whales sorting out vulnerable short positions lately.

[Putncalls]

I don't know how the shorts cover 13 million shares without a squueeeeeeeze?

[ebster123]

Options and a PRAYER!!!!! Time will tell.....

[ellerslick]

Options and a PRAYER!!!!! Time will tell.....

It would take 130,000 call contracts to cover the 13 million shorts.  The other day I did a very rough count of open interest from May out to 2015 and about 67,460 contracts. I am an options novice but somebody has to be on the other side of the trade which at this time represents a lot of risk for the premium. Somebody once stated there are not enough options contracts to cover the shorts. Any insight is welcome.

[jft310]

Evaluating risk is hard because of straddles, spreads etc which means more than 1 option contract in a position, Then we have the market maker who has to take the other side of a trade whether theirs a natural or not. They can use naked shorting to balance their book though. I have always thought part of the outstanding short interest must be the market maker, I estimate 6 million of IOC's short interest is the market maker. I have never seen IOC short interest below 6 million. With additional float and derisking of the stock I expect the market makers short position to drop way down. My opinion.