Events Trader #36: Why Readers Digest is about to bounce back

The big news this week is the revised deal struck between Kraft and Cadbury – which pretty much means that our strategy has not worked out. Though this was a bet that was certainly worth taking.

Image removed.

19th January 2010

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Trader Portfolio
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OPEN TRADES
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Distressed Assets
IssueTip dateCompany/ AssetReccomendationPrice thenPrice now (19th Jan)Gain (%)
EVT #219/05/2009Barclays XS0110537429Buy659952.31
EVT #219/05/2009Nationwide XS0284776274Buy487250.00
EVT #1518/08/2009Barclays XS0205937336Buy60.77726.85
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Merger - Risk Arbitrage
IssueDateCompany/ AssetDetailsPrice now (19th Jan)Exp. Closing DateChange (%)
EVT #1228/07/2009Oracle (US: ORCL);Sun Microsystems (US: JAVA)Buy Sun Micro only: 50% at $9.24; 50% at $9.15 (so average price $9.19)$9.41Was Oct-2009, now after Jan-20102.39%
EVT #2206/10/2009Computer Servs (US: ACS);Xerox (US: XRX)Buy Computer Servs @ $52.26Short-sell Xerox @ $7.44Ratio ACS 1 : 4.935 XRXACS: $61.98 XRX: $8.86Q1 20105.19%
EVT #2810/11/2009Burlington Northern Santa Fe (US: BNI);Berkshire HathawayBuy BNI only at £97.60$99.22Q1 20101.66%
EVT #3024/11/2009Iberia (SM: IBLA);British Airways (LSE: BAY)Buy Iberia @ €2.02Short-sell British Airways @ 204pRatio IBLA 0.98: 1 BAYIBLA: €2.13;BAY: 200pQ4 20100.56%
EVT #3512/01/20103com (Nasdaq: COMS)Buy 3Com at $7.64$7.56Q2 2010-1.05%
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Other Trades
IssueDateType of TradeCompany/ AssetDetailsPrice now (19th Jan)Change (%)
EVT #2313/10/2009LongLadbrokes (LSE: LAD)Buy at 140p; double up if hits 120p: TARGET 180p149p6%
EVT #2810/11/2009LongDragon Oil (LSE: DGO)Buy at 447p446p0%
EVT #3208/12/2010LongReaders Digest bond DBUY ISIN US755267AF83 at 1.5c0.2c-83%
EVT #3512/01/2010Options TradingCadburyBUY the Cadbury's March Put option, strike price 760p at 23pCLOSE POSITION AT 1.5-93%
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Watchlist
IssueDateType of TradeCompany/ AssetDetailsPrice now (19th Jan)Change (%)
EVT #3208/12/2009LongING (AMS: INGA)Buy it if it falls below €5.40€7.50N/A
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CLOSED TRADES
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IssueDateType of tradeCompany/ AssetDetailsStatusGain (%)
EVT #112/05/2009Rights issueSnam Rete Gas (Milan: SRG)BUY: £3.00 - £3.10 SELL: €3.35 and €3.40Did not reach target BUY priceN/A
EVT #219/05/2009Distressed assetLloyds XS0107228024Buy at 45-46Sold 10/11/09 at 8891.0%
EVT #326/05/2009Merger- risk arbitrageWyeth (US: WYE)Pfizer (US: PFE)Buy WyethShort-sell PfizerRatio WYE 1 : 0.985 PFEMerger completed 15/10/098.8%
EVT #723/06/2009Merger- risk arbitrageSchering Plough (US: SGP)Merck (US: MRK)Buy Schering-PloughShort-sell MerckRatio SGP 1 : 0.5767 MRKMerger completed 03/11/095.9%
EVT #1518/08/2009Distressed assetHBOS XS0353590366Buy at 52Sold 10/11/09 at 9990.3%
EVT #1518/08/2009Distressed assetRBS XS0193721544Buy at 65.4Sold 10/11/09 at 61-6.7%
EVT #1625/08/2009Index TradingiPath S&P 500 VIX (NYSE: VXX)Bought at $55 - 56.50Sold at $43.70 on 27/10/09-22.6%
EVT #1701/09/2009Merger- risk arbitrageMarvel (US: MVL)Disney (US: DIS)Buy MarvelShort-sell DisneyRatio MVL 1 : 0.745 DISDid not reach target buy priceN/A
EVT #1808/09/2009Distressed assetRBS XS0102480869Buy at 75Sold 10/11/09 at 68-9.3%
EVT #1915/09/2009ShortNational ExpressShort sell at 480pClosed short at 390p 19/10/0923%
EVT #2029/09/2009Options TradingVodafonePut option Strike 140November 2009 @ 6pSold at 10p 13/10/0967%
EVT #2026/05/2009Options TradingFTSE 100Put option Strike 5,100November 2009 @ £1.40Sold at £2.25 02/10/0960%
EVT #2704/11/2009Options TradingCadburyDecember 2009 Put, Strike 24p / December 2009 Put, Strike 740pSold 10/11/09 for negligible gain0%
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