We see an opportunity to take advantage of merger arbitrage. WBD has agreed to be bought out by PSKY (Paramount) for 31/share in an all cash deal. We an excellent risk/reward/probability to arbitrage with the deal expected to close in the 3rd quarter of this year. Entered into a WBD bull call spread as follows:
Buy to open: WBD Sep 18th (monthly) 28.00 strike call
Sell to open: WBD Sep 18th (monthly) 30.00 strike call
Debit: 1.05
Max risk = 1.05 or $105.00 per spread
Max reward = 0.95 or $95.00 per spread