I am rusty with options but I was thinking about something similar. But:
Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset. A call buyer profits when the underlying asset increases in price.
So you need to have the stock I think.
Different if you want to buy. If you buy it, you might get UBS stocks at some point?
Also I was thinking that the price will go lower, so it’s better a put.
Selling puts, since the price should sooner or later go back to 0.75.
First, listed options are traded on organized exchanges, same as other financial instruments. You are not trading against other users of IB, you are not trading against IB (this is how CFD work), you are trading against all exchange participants, including institutionals, market makers and so on.
Second, you can still trade Swiss warrants at IB, there is just no physical delivery. It means for example to profit from call, you have to close your position before it expires.
P.S. I also think that buying options is a better tool to profit from strong short term price movements and your risk is controlled.
It’s the “phisical delivery” that I don’t understand. No one is expecting a phisical delivery I think. I’d expect a delivery of the underlying on my account, that’s it. So I understood they meant that if I’ve bought a call and I want the underlying, I have to ask for it before the option ends.
Hi, I try to be more precise: I have some CS share in USD (I trade on NYSE). I aim to sell some call options over them but I’m worry about the moment that the CS share will convert to UBS share. In such a case the buyer of the call how can exercise the contract while CS share will disappear?
long 30,000 CSGN shares (bought @ 2.173; worth 25 kCHF today)
short 100 Apr 21 2.85 Call (sold for CHF 2,000 and basically worthless as of today)
short 200 May 19 1.80 Call (sold for CHF 6,000 and basically worthless as of today )
My guess is that the actual merger and delisting of CSGN will take longer and that all my calls will expire worthless.