The market was very volatile yesterday. It started slightly in the red, then green a bit, and then red again. By mid-day, Dow Jones was up more than 100 points. But, DJIA finally gave up the gains (ended 55 points compared to Friday close) and break through its 13,000 support level!
Anyway, the trades were all about IBM acquiring COGN for $5 billion. Typically (but not always) the acquired company will gain in stock value and the acquiring company will lose a bit. But apparently, acquiring COGN will bring in great values and investors see this and shoot up IBM stock price.
Another good example of a 'win-win' M&A (merger & acquisition) is the recent BHP Billiton (BHP) and Rio Tinto (RTP) one!
COGNOS (COGN)
Straight ITM Nov-07 52.5 Call
Entry 2,25 Exit 2.50 (11% profit)
Day trade based on TCT
INTERNATIONAL BUSINESS MACHINE (IBM)
Straight ITM Nov-07 100 Call
Entry 4.00 Exit 4.50 (12.5% profit)
Day trade based on my 'revised' TCT
Anyway, I lost US$700 (for 2 contracts) on my personal account for GOOGLE (GOOG), since it dropped more than 100 points over the past few days. Fortunately, I don't trade stocks (otherwise, 2 lots x 100 points loss = $20,000!!!).
If you are interested to find our more about me, Forex Trading or my Forex Asia Academy, let me welcome you to my complimentary Forex session. Please feel free to visit my corporate website to find out more. Get in touch with you real soon!
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