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A comment on Never Hertz to Ask. Parent comment

Re:Never Hertz to Ask by IAmGraydon on Sunday June 14, 2020 @09:52AM (#23517633)
>Don't look at the price action; that on its own is not surprising. Shares in near-bankrupt companies trade like options (because they are options - on the potential of recovery), with extreme volatility one would normally see in individual options contracts.

I get your point, but it's really not correct. Shares do not have delta, gamma, vega, strike price, implied volatility or any of the other factors that go into pricing options. They are not derivatives and there is no premium. Yes, a penny stock (which is what HTZ is at this point) has extreme volatility, but comparing them to options is way off. A share represents actual ownership in the company while an option does not until it is exercised (and is then no longer an option). By your example, any stock holding would be an option on the price of the stock going up, but it's not - you already own it.

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Re:Never Hertz to Ask by JumpCrisscross on Sunday June 14, 2020 @10:04AM (#23517707)
> comparing them to options is way off

Not entirely. Equity can be modelled as an option on a company’s assets, struck against its debt. This is fine for equity (and the equity component of fulcrum securities) in a bankruptcy.

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Re:Never Hertz to Ask by flashyfaffe2 on Sunday June 14, 2020 @10:28AM (#23517853)
If I rememberwell, this kind of strategy has a name called Captical structure arbitrage, where the most basic strategy is to traded convertible bonds. Most complex strategies include taking position on different asset class of the same company ( equity, bond and CDS).
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