mergers and acquisition volume

[jefreunde74]

hi! folks a question
how many volume should i buy when im trading a merger and acquisition?
i mean when the trasaction has a sudden jump from 30 to 50%

thanx

 

[binarymatt]

Are you trading stocks or options? I'm assuming your trying to trade some sort of M&A strategy? Position size is ultimately going to be dependent on your appetite for risk

 

[jefreunde74]

ok so let me give you an example
we have this stock X trading today at 7.71 and the M&A would make it jum like 30%, to 10. i could see that when an acquisition happens the volume jumps like 10x time the average volume. so if the average volume today is 3M, after the M&A the volume would be like 30M. So 30M times 10, we are talking about 300M in play that day.
So my question is this: if i want to be only 1% of the money that is being play that day (we are talking about 3M), should i buy, before the M&A, 3M / 7.7 = aprox 390.000 shares?
But another thing that i saw is the the jump of the M&A happens in the pre-market when the volume is minimum, i dont know if i can buy that amount of shares if the volume in the pre-market is at maximum like 5000 shares
What would you do in this scenario?
thanx

 

[binarymatt]

Not sure what kind of information you're privy to but if you know an M&A is happening before it hits the market then I would invest my entire account plus any leverage I'm allowed