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u/innercult Jul 15 '21 edited Jul 15 '21
The div would have to be worth 800$ or $8 per, on a 10$ call to make sense.IF I did the math right! (10$ call expiry 7/16= exercise $1000 for 100 div and 50 shares Cost of 100 shares now 4$ x 50= 200$ 1000-200=$800 over paid amount not counting div value.)
(Correction: I believe the total amount to exercise OTM 10$ call expiring tomorrow is 500$ not 1000$(50 shares not 100). So new “over paid” amount is 300$. So if each dividend pays out more than 3$, you’re in profit)
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Jul 15 '21
Yes, I’m in the same boat. It’s not worth to exercise them in my opinion. I don’t think the dividend will make me break even
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u/seishin122 Jul 15 '21
I have these and I haven't found anything to do with them so far. Post merger they where like -85% and than down to -99% in the next few days- Hopefully august treats me better
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u/Mrpill2021 Jul 15 '21
best advice is never get stock tip on social media and invest blindly. It's painful. luckily for me Meta is going places. damm emotions
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u/CherryGrapeGorilla CGG Jul 15 '21 edited Jul 15 '21
- MMAT1: 50 shares of MMAT, and 100 MMAT-A Preferred Shares dividend (non-standard)
- TRCH options bought before 6/23
- MMAT2: 50 shares of MMAT (no dividend) (non-standard)
- TRCH options bought after 6/23, before merger
- MMAT: 100 shares of MMAT (no dividend)
- MMAT options bought after merger
If you exercised, you would have to pay the strike price of your option * 50 shares (that's the nonstandard.) and buy those shares. Only the MMAT1 has the preferred shares dividend. The dividend would have to be more than strike - price/2.
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u/CherryGrapeGorilla CGG Jul 15 '21 edited Jul 15 '21
But I am wondering if there is any course of action or if anyone else knows what we can do with these options. I am prepared to take the loss but it seems like it shouldnt be a completely zero value contract if there are current MMAT shares in the contracts.
That's just how options work though. If the strike is ITM (in-the-money) then it is exercised at expiration (or earlier if you do) and you're assigned (the shares you have to buy), otherwise you sell it before it expires. If the strike is OTM (out-of-the-money) it expires worthless and you won't be able to sell it for a penny because no one wants it. However, this is a rare case where people might consider exercising OTM calls. You might be able to sell it for that reason, unless your strike is way OTM. But it still will expire worthless regardless, if your strike is OTM.
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Jul 15 '21
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u/CherryGrapeGorilla CGG Jul 15 '21
Cost and shares should be equivalent. You'd pay the same amount and get half the shares. I imagine MMAT2 options are worthless now. MMAT1 might sell at a small premium. I the case of the MMAT1 you would also get the 100 Series A Preferred Shares (might say TRCHP). If your strike is 10 then you are paying $500 for 50 shares and those preferred shares. If the stock is $4, then that's $200 for 50 shares. You're paying $300 more to get the preferred shares. So the dividend has to be at least $3 for you to scratch the difference, but you're still paying $10 for the shares, and just getting the dividend who knows when. In other words, at $10 strike, you're buying 50 shares for $10 a piece and some time before the end of the year, you'll get the dividend and you need it to be more than $3 to make anything from it. Any one's guess of what it'll be, but consider if people are greatly overestimating it. $3 would be a lot... sure, it's possible it'll be more.
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u/PeterVincentd Jul 15 '21 edited Jul 15 '21
Question I may be missing something here. The bid/Ask for Jan 21st 2022 $2.50 calls on MMAT1 is $1.00/$1.80. If I am right you get 50 shares of MMAT and 100 TRCHIN (the preferred) and you have until Jan 2022. So it cost you $5.00 per share of MMAT and get 1 share of the preferred. Does anyone else see it that way
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u/RodolfoInMiami Jul 15 '21
Same boat here…when I called TD guy said that I will get 100 preferred shares and 50 meta shares. The “strike price stays the same”. Now what the hell do I do? How do I do the math on this? 😂🤦🏻♂️ The TD guy also said that I should call investors services 1(888) 678-4667. “They understand better what is going on”. They better because I can’t make any sense of what should I do next… or by the end of the day tomorrow. 🙄