I know there is already an open topic for the merger discussion, however the discussion I’d like to initiate is different in its nature and I think it’s better in a seperate thread.
Last year holi opened a discussion about a potential arbitrage play for the merger as seen here:
Since then the price ratio of XLNX/AMD has mostly closed in near the merger exchange rate of 1.72 as seen here:
You can see on the chart that the current profit for holding XLNX shares through the merger is around 1.92%. This of course assumes the price stays the same until the currently unkown merger, which is unlikely. Buying XLNX shares right now is a cheaper way of getting AMD shares assuming the merger happens, as it will likely track AMD’s price movement, but it is hardly an arbitrage opportunity.
However to me there is a lot of uncertainty around the behavior of options and its pricing immediately before and after the merger and this is the topic I would like to dig deeper into.
Disclaimer: unless stated otherwise, calculations will be in a hypothetical scenario where we are immediately before merger, prices used are as per closing on Friday 28th January 2022. AMD: $105.24, XLNX: $177.95
Merger details
AMD expects to acquire XLNX in Q1 of 2022 in a stock-for-stock purchase based on the latest SEC filings. XLNX shareholders will receive 1.7234 shares of AMD for every share of XLNX owned.
Options
This is a topic where I would like get opinions. The documents below provides the following information regarding options after the merger:
Xilinx, Inc. - Anticipated Adjustment
Option Symbol: XLNX
Option Symbol: XLNX changes to AMD1
Strike Divisor: 1
Contracts Multiplier: 1
New Multiplier: 100 (e.g., a premium of 1.50 yields $150; a strike of 120 yields $12,000.00)
New Deliverable Per Contract:
- 172 Advanced Micro Devices, Inc. (AMD) Common Shares
- Cash in lieu of 0.34 fractional AMD Common Shares
Pricing:
Until the cash in lieu amount is determined, the underlying price for AMD1 will be determined as follows:
AMD1 = 1.7234 (AMD)
https://infomemo.theocc.com/infomemos?number=48452
SC1. My interpretation of this is the following:
Before merger:
Ticker: XLNX
Strike: $180
Expiry: 4th Feb 2022
Deliverable: 100 shares of XLNX
After Merger:
Ticker: AMD1
Strike: $180
Expiry: 4th Feb 2022
Deliverable: 172 shares of AMD and $35.7816 cash (0.34*$105.24 - closing price of AMD)
SC2. Others have different may have a different understanding as follows:
Before merger:
Ticker: XLNX
Strike: $180
Expiry: 4th Feb 2022
Deliverable: 100 shares of XLNX
After Merger:
Ticker: AMD1
Strike: $104.44 ($180/1.7234)
Expiry: 4th Feb 2022
Deliverable: 172 shares of AMD and $35.7816 cash (0.34*$105.24)
What has been messing with my brain here, is that assuming one of two above is true, there are opportunities for incredible r/r strategies either way, possibly even if we can’t be sure which one turns out to be correct.
Risk factors
- After ticker change, liquidity will be most likely very poor for AMD1 options, with a possibility that you have to excersize them to realize profit.
- The obvious possibility that my thinking is fundamentally flawed possibly in several steps.
This is where I expect to receive critical feedback about my calculations and assumptions - Early assignment in case of strategies involving a short position
Calculation
As I don’t want to assume that my understanding is correct of how the ticker change for options will be done, I will provide calculations for both scenarios.
As an example I will be using options expiring 4th February 2022.
The aim of the calculations is to estimate the P/L of different positions opened immediately before merger, holding through merger using closing prices from Friday 28th January 2022.
Consider AMD1 prices estimates because the options pricing is not calculated with exact attributes of the options, but rather they are priced based on AMD options prices of the same Strike and expiration where applicable, or looking for the closest available strike where necessary.
SC1
Call Options
Before Merger | After Merger | ||||||||
---|---|---|---|---|---|---|---|---|---|
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | AMD1 Strike | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | |
XLNX220204C00135000 | 135 | $62.00 | $6,200.00 | 135 | $0.12 | $21 | $(6,179) | -99.67% | |
XLNX220204C00140000 | 140 | $59.70 | $5,970.00 | 140 | $0.10 | $17 | $(5,953) | -99.71% | |
XLNX220204C00150000 | 150 | $23.18 | $2,318.00 | 150 | $0.06 | $10 | $(2,308) | -99.55% | |
XLNX220204C00160000 | 160 | $18.30 | $1,830.00 | 160 | $0.03 | $5 | $(1,825) | -99.72% | |
XLNX220204C00165000 | 165 | $15.50 | $1,550.00 | 165 | $0.02 | $3 | $(1,547) | -99.78% | |
XLNX220204C00170000 | 170 | $8.33 | $833.00 | 170 | $0.02 | $3 | $(830) | -99.59% | |
XLNX220204C00175000 | 175 | $7.25 | $725.00 | 175 | $0.02 | $3 | $(722) | -99.53% | |
XLNX220204C00180000 | 180 | $5.85 | $585.00 | 180 | $0.01 | $2 | $(583) | -99.71% | |
XLNX220204C00185000 | 185 | $3.15 | $315.00 | 185 | $0.02 | $3 | $(312) | -98.91% | |
XLNX220204C00190000 | 190 | $3.27 | $327.00 | 190 | $0.02 | $3 | $(324) | -98.95% | |
XLNX220204C00195000 | 195 | $1.81 | $181.00 | 195 | $0.03 | $5 | $(176) | -97.15% | |
XLNX220204C00200000 | 200 | $1.45 | $145.00 | 200 | $0.01 | $2 | $(143) | -98.81% | |
XLNX220204C00205000 | 205 | $0.90 | $90.00 | 205 | $0.01 | $2 | $(88) | -98.09% | |
XLNX220204C00210000 | 210 | $0.57 | $57.00 | 210 | $0.01 | $2 | $(55) | -96.98% | |
XLNX220204C00215000 | 215 | $0.48 | $48.00 | 215 | $0.01 | $2 | $(46) | -96.42% | |
XLNX220204C00220000 | 220 | $0.29 | $29.00 | 220 | $0.04 | $7 | $(22) | -76.28% | |
XLNX220204C00230000 | 230 | $0.23 | $23.00 | 230 | $0.01 | $2 | $(21) | -92.52% |
Put Options
Before Merger | After Merger | ||||||||
---|---|---|---|---|---|---|---|---|---|
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | AMD1 Strike | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | |
XLNX220204P00095000 | 95 | $0.10 | $10.00 | 95 | $1.44 | $247 | $237 | 2368.20% | |
XLNX220204P00135000 | 135 | $0.80 | $80.00 | 135 | $29.98 | $5,156 | $5,076 | 6344.63% | |
XLNX220204P00140000 | 140 | $0.22 | $22.00 | 140 | $35.00 | $6,020 | $5,998 | 27263.64% | |
XLNX220204P00145000 | 145 | $1.75 | $175.00 | 145 | $40.00 | $6,880 | $6,705 | 3831.43% | |
XLNX220204P00150000 | 150 | $1.12 | $112.00 | 150 | $45.03 | $7,744 | $7,632 | 6814.55% | |
XLNX220204P00155000 | 155 | $1.55 | $155.00 | 155 | $49.90 | $8,583 | $8,428 | 5437.29% | |
XLNX220204P00160000 | 160 | $2.39 | $239.00 | 160 | $54.90 | $9,443 | $9,204 | 3850.96% | |
XLNX220204P00165000 | 165 | $4.80 | $480.00 | 165 | $59.85 | $10,294 | $9,814 | 2044.63% | |
XLNX220204P00170000 | 170 | $5.30 | $530.00 | 170 | $65.15 | $11,206 | $10,676 | 2014.30% | |
XLNX220204P00175000 | 175 | $7.00 | $700.00 | 175 | $69.75 | $11,997 | $11,297 | 1613.86% | |
XLNX220204P00180000 | 180 | $11.80 | $1,180.00 | 180 | $74.83 | $12,870 | $11,690 | 990.67% | |
XLNX220204P00200000 | 200 | $30.56 | $3,056.00 | 200 | $94.83 | $16,310 | $13,254 | 433.70% |
SC2
For SC2 the pricing of options after merger is done 2 ways below. Strike price of XLNX is divided by 1.72, then to find pricing based on AMD options, the new strike is rounded to the nearest strike down, and seperately also up. This is not too accurate, but the actual price would be between these. These are just numbers to give an approx. illustration, if there is merit to any of the analyses, I can put time to get more accurate numbers.
Also for less liquid strikes, last price can be older and not representative of potential realistic fills, but since the spread for these was also wide, I left them with last price for now.
Call Options
Before Merger | After Merger | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Strikes rounded down | Strikes rounded up | ||||||||||||||
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | AMD1 strike rounded down | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | AMD1 strike rounded up | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | ||
XLNX220204C00160000 | 160 | $19.70 | $1,970.00 | 90 | $15.70 | $2,700 | $730 | 37.08% | 95 | $11.70 | $2,012 | $42 | 2.15% | ||
XLNX220204C00165000 | 165 | $15.75 | $1,575.00 | 95 | $11.70 | $2,012 | $437 | 27.77% | 100 | $8.08 | $1,390 | $(185) | -11.76% | ||
XLNX220204C00170000 | 170 | $12.78 | $1,277.50 | 95 | $11.70 | $2,012 | $735 | 57.53% | 100 | $8.08 | $1,390 | $112 | 8.79% | ||
XLNX220204C00175000 | 175 | $9.18 | $917.50 | 100 | $8.08 | $1,390 | $472 | 51.47% | 105 | $5.08 | $874 | $(44) | -4.77% | ||
XLNX220204C00177500 | 177.5 | $6.69 | $669.00 | 100 | $8.08 | $1,390 | $721 | 107.74% | 105 | $5.08 | $874 | $205 | 30.61% | ||
XLNX220204C00180000 | 180 | $6.65 | $665.00 | 100 | $8.08 | $1,390 | $725 | 108.99% | 105 | $5.08 | $874 | $209 | 31.39% | ||
XLNX220204C00185000 | 185 | $4.50 | $450.00 | 105 | $5.08 | $874 | $424 | 94.17% | 110 | $2.88 | $495 | $45 | 10.08% | ||
XLNX220204C00190000 | 190 | $3.33 | $332.50 | 110 | $2.88 | $495 | $163 | 48.98% | 115 | $1.52 | $261 | $(71) | -21.37% | ||
XLNX220204C00195000 | 195 | $1.86 | $185.50 | 110 | $2.88 | $495 | $310 | 167.04% | 115 | $1.52 | $261 | $76 | 40.94% | ||
XLNX220204C00197500 | 197.5 | $1.37 | $137.00 | 110 | $2.88 | $495 | $358 | 261.58% | 115 | $1.52 | $261 | $124 | 90.83% | ||
XLNX220204C00200000 | 200 | $1.41 | $141.00 | 115 | $1.52 | $261 | $120 | 85.42% | 120 | $0.76 | $131 | $(10) | -7.29% | ||
XLNX220204C00202500 | 202.5 | $0.83 | $83.00 | 115 | $1.52 | $261 | $178 | 214.99% | 120 | $0.76 | $131 | $48 | 57.49% | ||
XLNX220204C00205000 | 205 | $0.89 | $89.00 | 115 | $1.52 | $261 | $172 | 193.75% | 120 | $0.76 | $131 | $42 | 46.88% | ||
XLNX220204C00210000 | 210 | $0.64 | $63.50 | 120 | $0.76 | $131 | $67 | 105.86% | 125 | $0.40 | $69 | $5 | 8.35% | ||
XLNX220204C00212500 | 212.5 | $0.47 | $47.00 | 120 | $0.76 | $131 | $84 | 178.13% | 125 | $0.40 | $69 | $22 | 46.38% | ||
XLNX220204C00215000 | 215 | $0.29 | $28.50 | 125 | $0.40 | $69 | $40 | 141.40% | 125 | $0.40 | $69 | $40 | 141.40% | ||
XLNX220204C00217500 | 217.5 | $0.33 | $33.00 | 125 | $0.40 | $69 | $36 | 108.48% | 130 | $0.23 | $40 | $7 | 19.88% | ||
XLNX220204C00220000 | 220 | $0.25 | $25.00 | 125 | $0.40 | $69 | $44 | 175.20% | 130 | $0.23 | $40 | $15 | 58.24% | ||
XLNX220204C00225000 | 225 | $0.20 | $20.00 | 130 | $0.23 | $40 | $20 | 97.80% | 135 | $0.12 | $21 | $1 | 3.20% | ||
XLNX220204C00230000 | 230 | $0.12 | $12.00 | 130 | $0.23 | $40 | $28 | 229.67% | 135 | $0.12 | $21 | $9 | 72.00% | ||
XLNX220204C00235000 | 235 | $0.31 | $31.00 | 135 | $0.12 | $21 | $(10) | -33.42% | 140 | $0.10 | $17 | $(14) | -44.52% | ||
XLNX220204C00240000 | 240 | $0.10 | $10.00 | 135 | $0.12 | $21 | $11 | 106.40% | 140 | $0.10 | $17 | $7 | 72.00% | ||
XLNX220204C00245000 | 245 | $0.98 | $98.00 | 140 | $0.10 | $17 | $(81) | -82.45% | 145 | $0.07 | $12 | $(86) | -87.71% | ||
XLNX220204C00255000 | 255 | $1.00 | $100.00 | 145 | $0.07 | $12 | $(88) | -87.96% | 150 | $0.06 | $10 | $(90) | -89.68% | ||
XLNX220204C00260000 | 260 | $0.40 | $40.00 | 150 | $0.06 | $10 | $(30) | -74.20% | 155 | $0.04 | $7 | $(33) | -82.80% | ||
XLNX220204C00265000 | 265 | $0.08 | $8.00 | 150 | $0.06 | $10 | $2 | 29.00% | 155 | $0.04 | $7 | $(1) | -14.00% | ||
XLNX220204C00270000 | 270 | $0.05 | $5.00 | 155 | $0.04 | $7 | $2 | 37.60% | 160 | $0.03 | $5 | $0 | 3.20% | ||
XLNX220204C00280000 | 280 | $0.05 | $5.00 | 160 | $0.03 | $5 | $0 | 3.20% | 165 | $0.02 | $3 | $(2) | -31.20% |
Put Options
Before Merger | After Merger | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Strikes rounded down | Strikes rounded up | ||||||||||||||
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | AMD1 strike rounded down | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | AMD1 strike rounded up | AMD1 Last Price | AMD1 Contract Price | Long Position P/L | % Long Position P/L | ||
XLNX220204P00150000 | 150 | $1.12 | $112.00 | 85 | $0.35 | $59 | $(53) | -47.02% | 90 | $0.72 | $123 | $11 | 9.80% | ||
XLNX220204P00155000 | 155 | $1.55 | $155.00 | 90 | $0.72 | $123 | $(32) | -20.66% | 95 | $1.44 | $247 | $92 | 59.24% | ||
XLNX220204P00160000 | 160 | $2.39 | $239.00 | 90 | $0.72 | $123 | $(116) | -48.54% | 95 | $1.44 | $247 | $8 | 3.27% | ||
XLNX220204P00165000 | 165 | $4.80 | $480.00 | 95 | $1.44 | $247 | $(233) | -48.58% | 100 | $2.75 | $473 | $(7) | -1.46% | ||
XLNX220204P00167500 | 167.5 | $5.56 | $556.00 | 95 | $1.44 | $247 | $(309) | -55.61% | 100 | $2.75 | $473 | $(83) | -14.93% | ||
XLNX220204P00170000 | 170 | $5.30 | $530.00 | 95 | $1.44 | $247 | $(283) | -53.43% | 100 | $2.75 | $473 | $(57) | -10.75% | ||
XLNX220204P00175000 | 175 | $7.00 | $700.00 | 100 | $2.75 | $473 | $(227) | -32.43% | 105 | $4.75 | $817 | $117 | 16.71% | ||
XLNX220204P00177500 | 177.5 | $11.75 | $1,175.00 | 100 | $2.75 | $473 | $(702) | -59.74% | 105 | $4.75 | $817 | $(358) | -30.47% | ||
XLNX220204P00180000 | 180 | $11.80 | $1,180.00 | 100 | $2.75 | $473 | $(707) | -59.92% | 105 | $4.75 | $817 | $(363) | -30.76% | ||
XLNX220204P00182500 | 182.5 | $14.90 | $1,490.00 | 105 | $4.75 | $817 | $(673) | -45.17% | 110 | $8.23 | $1,415 | $(75) | -5.05% | ||
XLNX220204P00185000 | 185 | $17.55 | $1,755.00 | 105 | $4.75 | $817 | $(938) | -53.45% | 110 | $8.23 | $1,415 | $(340) | -19.39% | ||
XLNX220204P00187500 | 187.5 | $16.65 | $1,665.00 | 105 | $4.75 | $817 | $(848) | -50.93% | 110 | $8.23 | $1,415 | $(250) | -15.03% | ||
XLNX220204P00190000 | 190 | $17.40 | $1,740.00 | 110 | $8.23 | $1,415 | $(325) | -18.70% | 115 | $11.25 | $1,935 | $195 | 11.21% | ||
XLNX220204P00192500 | 192.5 | $18.65 | $1,865.00 | 110 | $8.23 | $1,415 | $(450) | -24.14% | 115 | $11.25 | $1,935 | $70 | 3.75% | ||
XLNX220204P00195000 | 195 | $21.27 | $2,127.00 | 110 | $8.23 | $1,415 | $(712) | -33.49% | 115 | $11.25 | $1,935 | $(192) | -9.03% | ||
XLNX220204P00200000 | 200 | $30.56 | $3,056.00 | 115 | $11.25 | $1,935 | $(1,121) | -36.68% | 120 | $15.85 | $2,726 | $(330) | -10.79% | ||
XLNX220204P00205000 | 205 | $30.05 | $3,005.00 | 115 | $11.25 | $1,935 | $(1,070) | -35.61% | 120 | $15.85 | $2,726 | $(279) | -9.28% | ||
XLNX220204P00210000 | 210 | $34.10 | $3,410.00 | 120 | $15.85 | $2,726 | $(684) | -20.05% | 125 | $20.08 | $3,453 | $43 | 1.26% | ||
XLNX220204P00220000 | 220 | $44.65 | $4,465.00 | 125 | $20.08 | $3,453 | $(1,012) | -22.67% | 130 | $24.78 | $4,261 | $(204) | -4.56% | ||
XLNX220204P00235000 | 235 | $58.80 | $5,880.00 | 135 | $29.98 | $5,156 | $(724) | -12.32% | 140 | $35.00 | $6,020 | $140 | 2.38% | ||
XLNX220204P00255000 | 255 | $56.50 | $5,650.00 | 145 | $40.00 | $6,880 | $1,230 | 21.77% | 150 | $45.03 | $7,744 | $2,094 | 37.07% |
Conclusion
Based on the profit possibilities above, it would be intuitive to assume that SC2 is more likely to happen, because SC 1 would just give insane returns, however based on the document linked earlier, I’m still not convinced. Even is SC2 is correct, as you can see there are opportunities for large gains, assuming my calcs are correct.
For a better visual (but more limited due to strike limitations), here is a table showing the possible outcomes if you buy an options:
Call Options
Before Merger | After Merger | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
SC1 | SC2 | SC2 | ||||||||||
Strikes rounded down | Strikes rounded up | |||||||||||
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | Long Position P/L | % Long Position P/L | Long Position P/L | % Long Position P/L | Long Position P/L | % Long Position P/L | |||
XLNX220204C00160000 | 160 | $18.30 | $1,830.00 | $(1,825) | -99.72% | $730 | 37.08% | $42 | 2.15% | |||
XLNX220204C00165000 | 165 | $15.50 | $1,550.00 | $(1,547) | -99.78% | $437 | 27.77% | $(185) | -11.76% | |||
XLNX220204C00170000 | 170 | $8.33 | $833.00 | $(830) | -99.59% | $735 | 57.53% | $112 | 8.79% | |||
XLNX220204C00175000 | 175 | $7.25 | $725.00 | $(722) | -99.53% | $472 | 51.47% | $(44) | -4.77% | |||
XLNX220204C00180000 | 180 | $5.85 | $585.00 | $(583) | -99.71% | $725 | 108.99% | $209 | 31.39% | |||
XLNX220204C00185000 | 185 | $3.15 | $315.00 | $(312) | -98.91% | $424 | 94.17% | $45 | 10.08% | |||
XLNX220204C00190000 | 190 | $3.27 | $327.00 | $(324) | -98.95% | $163 | 48.98% | $(71) | -21.37% | |||
XLNX220204C00195000 | 195 | $1.81 | $181.00 | $(176) | -97.15% | $310 | 167.04% | $76 | 40.94% | |||
XLNX220204C00200000 | 200 | $1.45 | $145.00 | $(143) | -98.81% | $120 | 85.42% | $(10) | -7.29% | |||
XLNX220204C00205000 | 205 | $0.90 | $90.00 | $(88) | -98.09% | $172 | 193.75% | $42 | 46.88% | |||
XLNX220204C00210000 | 210 | $0.57 | $57.00 | $(55) | -96.98% | $67 | 105.86% | $5 | 8.35% | |||
XLNX220204C00215000 | 215 | $0.48 | $48.00 | $(46) | -96.42% | $40 | 141.40% | $40 | 141.40% | |||
XLNX220204C00220000 | 220 | $0.29 | $29.00 | $(22) | -76.28% | $44 | 175.20% | $15 | 58.24% | |||
XLNX220204C00230000 | 230 | $0.23 | $23.00 | $(21) | -92.52% | $28 | 229.67% | $9 | 72.00% |
Put Options
Before Merger | After Merger | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
SC1 | SC2 | SC2 | ||||||||||
Strikes rounded down | Strikes rounded up | |||||||||||
Contract Name | XLNX Strike | XLNX Last Price | XLNX Contract Price | Long Position P/L | % Long Position P/L | Long Position P/L | % Long Position P/L | Long Position P/L | % Long Position P/L | |||
XLNX220204P00150000 | 150 | $1.12 | $112.00 | $7,632 | 6814.55% | $(53) | -47.02% | $11 | 9.80% | |||
XLNX220204P00155000 | 155 | $1.55 | $155.00 | $8,428 | 5437.29% | $(32) | -20.66% | $92 | 59.24% | |||
XLNX220204P00160000 | 160 | $2.39 | $239.00 | $9,204 | 3850.96% | $(116) | -48.54% | $8 | 3.27% | |||
XLNX220204P00165000 | 165 | $4.80 | $480.00 | $9,814 | 2044.63% | $(233) | -48.58% | $(7) | -1.46% | |||
XLNX220204P00170000 | 170 | $5.30 | $530.00 | $10,676 | 2014.30% | $(283) | -53.43% | $(57) | -10.75% | |||
XLNX220204P00175000 | 175 | $7.00 | $700.00 | $11,297 | 1613.86% | $(227) | -32.43% | $117 | 16.71% | |||
XLNX220204P00180000 | 180 | $11.80 | $1,180.00 | $11,690 | 990.67% | $(707) | -59.92% | $(363) | -30.76% | |||
XLNX220204P00200000 | 200 | $30.56 | $3,056.00 | $13,254 | 433.70% | $(1,121) | -36.68% | $(330) | -10.79% |
Closing
All of the above is based on the assumption that options pricing would be similar before the actual merger, which i believe is flawed, but given the actual merger, the same calculations can be done, to see feasibility. With the thought of the pricing before merger being different than usual, I believe there is also a possibility of a different play here, similar to pre-earnings IV expansion plays.
I would expect that days before the closing of the merger, XLNX options prices should start diverging from a usual options pricing, somewhat being affected by the expected value of the options after merger, which could be taken advantage of given proper calculations beforehand.
I have some ideas about this and will put some effort into thinking it through, and I will update the post if there is anything meaningful.
I also fully expect that there is some glaring mistake in my thought process, or I am overlooking something. If that’s the case, please be gentle