The share price of E-Trade Financial (ETFC) soared last week on news of a Morgan Stanley (MS) buyout offer. MS is expected to acquire ETFC for $13 billion. The news sent the stock from $45 to as high as $57 on the open the day the acquisition was announced. ETFC became a buyout target once consolidation started to occur in the brokerage industry to make up for vanishing commissions. I recently had recommended a trade buying March 13th calls at $0.71 in ETFC. Just over one week later, we were able to sell those calls out for around $10.80, a roughly 1,420% gain.
Jay Soloff is the Options Portfolio Manager at Investors Alley. He is the editor for Options Profit Engine, an investment advisory bringing you professional options trading strategies, with all the bells and whistles of Wall Street, but simplified so all you have to do is enter the trades with your broker.
