On Monday, we initiated several OGN positions as merger arbitrage strategies. We were successfully filled on the long calls, though not on the attempt for the bull call spread order. We have since adjusted the position by converting it into a bull call spread through the sale of a higher-strike call against the long calls. As a result, we now hold the January 2027 $12.50/$14.00 Bull Call Spread for a net debit of $1.00. With this defined-risk options position now in place, we exited the higher-risk stock position today. The details are below: Sold our 100 shares of OGN at 13.34
Completed the Bull Call Spread
Sell to open: OGN Jan 15th, 2027 (monthly) 14.00 strike calls
Credit: 0.15
This completes the Bull Call spread
Max risk = 1.00 or $100.00 per spread
Max reward = 0.50 or $50.00 per spread
This merger needs to be successfully completed more than 67% of the time to generate a positive expected return, and based on our analysis, we believe the probability of closing absolutely exceeds that threshold.