$AMD / $XLNX Merger - Options strategy for huge gains

Okay ladies and apes. I've been doing some serious thinking on the back of this massive AMD rally... XLNX call options are currently 50% under priced. I'm trying to do some quick maths here to figure out if XLNX leaps make sense. It seems a little too good to be true. I'll have to call the options clearing corp again on Monday to make sure my math checks out. infomemo.theocc.com/... If I have interpreted the above link correctly from options clearing corp. If I purchased a XLNX call option, and the merger goes through. Let's say a 160 strike price XLNX call. Upon merging, the XLNX call option would be converted to an AMD1 non-standard call option worth 172 shares, but with a strike price of $92. Current price of March 2022 AMD $92 call is $22.95 Current price of March 2022 XLNX $160 call is $17.75 The XLNX call not only costs less, but is worth 172 shares instead of 100. That same AMD Call should cost $39 if it was worth 172 shares representing a more than 50% discount. I guess the main unknown is what the strike price of the new AMD call option would be. This is the part I couldn't get a great answer when I phoned on Friday. Will call again hoping for some clarification. I'll probably look to pick up some Jan 2023 XLNX leaps... for 2 reasons. 1) My longest dated call options on AMD are Jun 2022, and I was going to look to get something longer term anyway 2) Seems like I can get them at a HUGE discount using XLNX options. ā€‹ Disclosure, I've been long AMD since the beginning of time. Not investing advice. I'll update the post once I get more clarification on the strike price post merger. Current amd positions for reference https://imgur.com/a/VQTiIlv

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$AMD / $XLNX Merger - Options strategy for huge gains

Aug 9, 2021

bullish

general Analysis

[1 min Read]

Okay ladies and apes. I've been doing some serious thinking on the back of this massive AMD rally...

XLNX call options are currently 50% under priced.

I'm trying to do some quick maths here to figure out if XLNX leaps make sense. It seems a little too good to be true. I'll have to call the options clearing corp again on Monday to make sure my math checks out.

infomemo.theocc.com/...

If I have interpreted the above link correctly from options clearing corp. If I purchased a XLNX call option, and the merger goes through. Let's say a 160 strike price XLNX call. Upon merging, the XLNX call option would be converted to an AMD1 non-standard call option worth 172 shares, but with a strike price of $92.

Current price of March 2022 AMD $92 call is $22.95
Current price of March 2022 XLNX $160 call is $17.75

The XLNX call not only costs less, but is worth 172 shares instead of 100. That same AMD Call should cost $39 if it was worth 172 shares representing a more than 50% discount.

I guess the main unknown is what the strike price of the new AMD call option would be. This is the part I couldn't get a great answer when I phoned on Friday. Will call again hoping for some clarification.

I'll probably look to pick up some Jan 2023 XLNX leaps... for 2 reasons.

1) My longest dated call options on AMD are Jun 2022, and I was going to look to get something longer term anyway
2) Seems like I can get them at a HUGE discount using XLNX options.

ā€‹

Disclosure, I've been long AMD since the beginning of time.

Not investing advice. I'll update the post once I get more clarification on the strike price post merger.

Current amd positions for reference https://imgur.com/a/VQTiIlv

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XLNX

Xilinx, Inc.

194.92

0
0.00%

Return

29.78%
Change % Since Posting
44.73
Change Since Posting
150.19
Price When Posted

Metrics

160.00
Target Price
8/ 10
Confidence
1-3 Years
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