In January 2022, Microsoft announced the acquisition of Activision Blizzard(ATVI) at a price of $95 per share. Microsoft’s offer is for $95 in cash, notwithstanding that Microsoft can change the offer, the price is viewed as fixed. This is because there is no share offer component. With Activision trading at $78.38 as at close on 1 Jul 2022, one will start to wonder if there is a merger arbitrage opportunity. The reason for the merger arbitrage opportunity is that the deal is pending approval from regulatory bodies. Hence there is a probability that the deal may not be approved in its entirety or at all. Warren Buffett’s Berkshire has taken a 9.5% stake in ATVI, betting that the deal will be approved, however he has acknowledged that the investment could result in losses should the deal not proceed. Here we will share a few ideas on how to leverage on this opportunity, utilising options to enhance the range of potential trading returns....