Verisimilar Unexercised Call Options: Deceptive Shorting Combined with Negative Activism

Posted: 16 Jun 2022

See all articles by Michael Blumeyer

Michael Blumeyer

Pepperdine University; Pepperdine University, Students

Date Written: June 5, 2022

Abstract

What if hedge funds needed to cut their losses on a financial security that was overpriced, but needed to position themselves to determine whether or not the security would either continue to rise, or experience a large sell-off? This paper explores the strategic side of hedge funds where the firm buys call options regarding the financial security and although St > K, the call options remain unexercised. Instead, the hedge fund sells the remaining shares, possibly in chunks a few days after. Does this happen at all, and if so, how often does this happen per annum? Is it possible to find out which firms or hedge fund managers behave and operate with an augmenting view of positive activism, followed by sudden negative activism the most?

Suggested Citation

Blumeyer, Michael and Blumeyer, Michael, Verisimilar Unexercised Call Options: Deceptive Shorting Combined with Negative Activism (June 5, 2022). Available at SSRN: https://ssrn.com/abstract=4128238

Michael Blumeyer (Contact Author)

Pepperdine University, Students ( email )

Malibu, CA
United States

HOME PAGE: http://www.blumeyerinvestmentpartners.com/

Pepperdine University ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States

HOME PAGE: http://www.blumeyerinvestmentpartners.com/

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