YHOO, YHOO, YHOO, what are you doing to me?  You may remember that I sold 4 YHOO May08 27.50 Puts on 4/23.  It was down at the time but well above $28.  I believe that MSFT will eventually buy it but I had lost track of the deadline MSFT set for this Saturday.  There is a lot of discussion on this deal with two major opinions.

• MSFT will raise take an aggressive approach and attempt a hostile takeover.
• MSFT will walk away.

If MSFT walks YHOO will plummet back down below $20 where it was before the offer.  Because the price is drifting down I suspect that people are and taking some profits either in anticipation of MSFT walking or just to be cautious.

On the other hand, if MSFT goes hostile I think that YHOO will rebound and my Puts will be safe.

My opinion?  For what it’s worth, and I have no special insight, I think MSFT will go hostile and end up with YHOO.

My current favorite saying seems to be - Time will tell.