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It sure feels like this market will go 1999 before the crash. Anyone has a good risk/reward trade to play a blow off top? Cutten? I know this is a play you like do to. Maybe way OTM Russell calls

If that happens I will consider myself unlucky and take whatever small loss I have. Just one month before they close the deal, I don't need to be that concerned. Most likely scenario is that the spread tightens out and the price is somewhere around where it is now

Shorted more LCC today and bought some Dec 20 2013 $17 puts just in case there is something crazy like a terrorist attack or something

Margin requirements, I don't need a perfect hedge. As a long there I'm hedged against a big loss its ok. I will close out the trade when it gets popular(it might become soon if some folks post on seeking alpha)

Right now I'm long 1.2 AAMRQ for every 1 short LCC. I think I will buy some OTM LCC puts just in case

I'm not sure these theoretical values will matter for those wanting to hold for a few weeks gunning for a quick 10-15% profit. Most trading AAMRQ will use the JPM formula even if it is wrong. By using a figure between JPM's and the beta I think I will be protected against a big tank in these...

I don't plan to hold through the distribution period. The JPM formula and the beta might be better for me because the formula might create a self-fulfilling prophecy (for better or worse) and the beta is already based on trading data

Shouldn't this be the opposite?

Actually i think you are right. I confused myself because of the beta calculations, I wanted more LCC short because AAMRQ beta is so high (slope to LCC stock) The right ratio would be 1.6 shares of AAMRQ for every share of LCC with a $ ratio $1 AAMRQ - $1.21 LCC but if dpar is right then...

Yes, this stock will be missed. One of my top stocks this year. FNMA too

I thought AAMRQ would gap up and run but now as much as this, it seems that Cramer pumped the stock pre-market. I sold most at 12.40s (too early) and kept part of the position with a short in LCC (2 shares of AAMRQ for every 1.65 shares short of LCC)

A correction, the hedge ratio is supposed to be $1 AAMRQ long and $1.6 (or more) for LCC, not the amount of shares. They are priced differently obviously

at 1.45 there was some big block trades, some idiots were selling the stock aggressively and got taken, once they were out the stock went rational again. I understand that guy has a different formula but he is not paid to research full-time so I think JPM is likely to be more accurate. In...

I'd say the profit potential takes care of the likelyhood that JPM is wrong, they could be wrong in a good way too (pool is smaller than they think) The issue with having to hold the AAG is a concern only in terms of the margin requirement in my account, I won't be able to bet big because of...

"If LCC goes bellow $14 then AAMRQ is worthless" I say worthless but JPM was talking about how the stock could have value even in the case that the merger didn't happen, he said the fair value would be $3.5 as old stock holders get a stake on the new AMR. I plotted the fair value data (from...

Because AAMRQ is non-marginable you have to put down 100% of the value of the stock to hold it, so even I won't bet big (it would hurt my ability to put other plays). The big funds can't juice it up their returns by going all-in, if they did they would have to sell other positions. I don't think...

Nice opportunity in a OTC merger play AAMRQ is worth: AAMRQ = LLC*1.582-22.56 This formula comes from JPM research using the merger documents, using the closes yesterday AAMRQ is worth $14.65, stock closed at $12. AAMRQ is a pink sheet stock that is non-marginable (hard to bet big), the...

The carry on Oanda is about -1% per year. I did a similar trade on CHF I think last year. I didn't had the patience to wait and didn't participated on the EUR rally gainst it when it popped (got unlucky too, I think I closed the trade 2 weeks before it rallied nicely) but the risk was quite...

The 2% should be 2% of your net liquidation value

Its harder to make a call here, the premium has gone down so there is not a ton of juice to take risk shorting puts. At the same time it seems that the market is seeing through the BS of the company and some research firms. Too crowded to short to, I don't want to get squeezed then hope for a...