I have stayed away from options for one reason, in investing you can’t time anything. Options have huge upside if the company executes and the market turns out as expected. Although the biggest risk is the timing of these events. You can have a company execute (look at ATPG) but the market ignore the company’s fundamentals in the short-term. In such a case, the options could end up worthless.
The CFW play was an arbitrage based on the company selling itself. Many lessons to be learned from this mistake, the main one is to stick with what you know well and are comfortable with. The CFW play was similar that of options, if the deal didn’t happen then there were huge risks w/ cash flow and potential of bank taking over the company.
A deal could still happen. The company is selling at a huge discount to market value of its assets. Although when you are desperate even the ugliest girls become hard to get (recall TXCO Resources).