Posted by Choivo Capital > 2018-12-26 12:16 | Report Abuse

Yeah, i hold some. Free money.

Posted by Ricky Yeo > 2018-12-27 06:43 | Report Abuse

If 80% probability of going through, then you have to make sure if it didn't go through, the price would not fall by 25%, otherwise, the expected value will be negative.

80% x 6.2% = 4.96%
20% x 25% = -5.00%

Posted by Ricky Yeo > 2018-12-27 06:53 | Report Abuse

But given a 6 months 'almost' risk free rate of fixed deposit is around 3.3%. The expected value in this arbitrage will need to beat that, so:

80% x 6.2% = 4.96%
20% x -8% = -1.60%

The magnitude of the fall needs to be 8% or less.

Posted by Choivo Capital > 2018-12-27 12:46 | Report Abuse

Hmm that is true.

Thanks.