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Ill-Strength4570 t1_jackhao wrote

Reply to comment by Mrchickenonabun in Microsoft deal with Activision by Positive-Trifle3854

wouldn’t 95$ calls be worthless if the buyout price is 95$?

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fulldouche t1_jae08pj wrote

If it's a call debit spread, that's exactly the point - buy the 90, sell the 95 - provides a capped loss if things go to hell while maximizing gains if it goes through since as you pointed out that 95 sold call will expire valueless

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Mrchickenonabun t1_jae3ja3 wrote

Exactly, the 95c is really just to provide a discount in buying the 90c

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