JAS 39 Gripen Fighter

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X-47 Unmanned Combat Aerial System

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X-47 Unmanned Combat Aerial System

Billionaire Carl Icahn Leverages Yahoo Options

Carl Icahn has been establishing a big stock position in Yahoo shares using options. Icahn's position of 59 million shares of Yahoo stock was created by using only 9.9 million actual shares. The question now is how can Mr. Icahn hold the rest without actually owning them?

The answer comes from a strategy that might be new to most people, but to options traders it's old hat. Icahn simply created 49 million shares of synthetic stock by buying 490,000 million call options on Yahoo stock and selling 490,000 million put options.

Synthetic positions are how investors and traders can replicate the performance and returns of stock without owning any actual stock. Buying a call and selling a put, usually of the same exercise price and expiration, is equivalent to being long the underlying stock. In other words, since he sold the right for someone else to be short the stock, if the long put holder decides to exercise their right, he will have to buy the stock at the strike price.

Another interesting thing about this trade is that Icahn bought American-style call options, which can be exercised anytime before expiration, and he sold European-style put options, which can only be exercised, and force him to buy the stock, at expiration. Icahn reportedly sold puts with a strike price of $19.50 and an expiration date of November 5th, 2010. Last year, Icahn used billions of dollars worth of options on Motorola stock to gain a significant position and win board seats in the tech company.

Brian Marber

Brian Marber can make a fair claim to be the most widely experienced technical analyst in the world, having been one since 1963.

A Fellow of the Society of Technical Analysts, he has been a blue button (stockbroker's clerk), stock market dealer, member of two UK stock exchanges, and managing partner of the London office of one of the largest regional broking houses.

At IOS and then at NM Rothschild & Sons, totally eschewing the fundamental approach, he was the first fund manager in the UK to manage large funds using only technical analysis.

Between 1976 and 1981, as a stockbroker, Brian Marber was voted by institutional investors No.1 technical analyst in the City for six successive years, a unique record.

When he started managing FX accounts in the 1990s, he was given exemption from the SFA Exams because of his ‘long and distinguished career in the investment industry.’

In 1980, in a survey conducted by the Treasurer of the Singer Company, Brian Marber had the best FX forecasting record in the world. For 15 years he wrote monthly for Euromoney Currency Report, and more recently for the Financial Times.

In the 1980s, Brian Marber was a Member of the Visiting Faculty of IMI (Geneva), the oldest established business school in Europe. In 1981, he founded a company which, with clients in 20 countries, became the world’s largest independent FX consultancy.

As a lecturer and teacher, Brian Marber has spoken at six Financial Times World Gold conferences, three Australian Gold Conferences, Johannesburg 100, Comex, and the Washington Gold & Silver Institute, and has also conducted seminars and teach-ins in Australia, Hong Kong, Singapore, Abu Dhabi, South Africa, Israel, Italy, UK, Eire, France, Germany, Denmark, Norway, Belgium, Holland, Switzerland and Luxembourg.

A one-time member of the Investment Panel of The Observer and regular broadcaster on TV and radio, Brian Marber is still an FX Consultant to banks, large corporations, hedge fund companies (including Europe’s oldest, Odey Asset Management), and private clients.