gembree

EMC Corp.'s a Good Way To Play VMware

VMW options are now available, and given the ludicrous implied volatility on VMW despite EMC being 60% levered to it, why wouldn't you write a call on VMW instead and hedge with EMC (given that you have privilege beyond simple buy-writes)? It's true that the relative valuation gap could continue to expand, but it could also contract, and the premium is a lot better.