At what price BP?

[dhpar]

Quote from atticus:

Nah, stay with the horse that brung-ya. You're throwing new tickers in after the fact. As an aside, HNR does less than $2MM notional in daily turnover.

hey atticus you asshole....i hope you are from a trading desk so you can take it.

i never suggested you should do any of those pairs - in fact i suggested just the opposite (read my posts).

I said that if you must do a pair trade then SLB seems better. this is largely because it is closer in size to BP and better diversified... but also because of the leverage. if there is a long lasting moratorium combined with the credit crunch DO may suffer big and may even come close to tight on money (not likely though). and we saw what leverage did to the oil sector in 2008...

btw you never said why the trade against DO makes sense...

lastly, you started some stupid betting contest here. i have no time for this BS - have enough of betting against the market.

cheers (no evil )


P.S. 2MM value traded is good enough if it becomes 4MM by the christmas on the same volume...

 

[atticus]

Quote from dhpar:

hey atticus you asshole....i hope you are from the trading desk so you can take it.

i never suggested you should do any of those pairs - in fact i suggested just the opposite (read my posts).

I said that if you must do a pair trade then SLB seems better. this is largely because it is closer in size to BP and better diversified... but also because of the leverage. if there is a long lasting moratorium combined with the credit crunch DO will suffer big and may even come close to tight on money. and we saw what leverage did to the oil sector in 2008...

btw you never said why the trade against DO makes sense - i doubt you even know in what condition their rigs are and where to look it up...

lastly, you started some stupid betting contest here. i have no time for this BS - have enough of betting against the market.

cheers (no evil )


P.S. 2MM value traded is good enough if it becomes 4MM by the christmas on the same volume...

Wow, you're thin-skinned. I don't recall an ad hom attack in that post, and my quote in your reply reads the same as I wrote it. My comments on HNR's turnover made your pussy wet?

So to get it straight... now you're suggesting shorting DO and buying BP. okok, well that certainly makes the math easier when you're eating shit in 60 days.

EDIT: dhpar, aaa, and cutten seem to have some motivation to save me from myself. You can all eat a dick-steak sandwich in 60 days, or I may have to eat my words (and the sandwich). Either way, 60-days and counting. I am done arguing with the remedials. There is nothing to say where the switches are concerned until 60-days has elapsed.

From 6/4/10 close

DO outperforms BP
DO outperforms SLB

 

[dhpar]

Quote from atticus:

So to get it straight... now you're suggesting shorting DO and buying BP. okok, well that certainly makes the math easier when you're eating shit in 60 days.

i did not know i converse with a retard. if i did know that i would not bother. well lesson learned.

and no - i am not suggesting shorting DO against BP (and definitely not suggesting shorting DO outright). see my original post (below).

funny you feel it is necessary to defend your trade on ET - you should also start a thread on yahoo boards. LOL

i see you need some head start (to win the bet with yourself against the rest of the world) - is that why you count from Jun-04?

enough said.

Original Quote from dhpar:

yeah sure - must be a lovely pair trade in such a volatility. on top of that there are plenty of possible scenarios where DO goes to hell while BP nicely chimes along... SLB is likely much better fit...

p.s. btw stat-arb should have no business in this whatsoever. this is a structural change, news driven and totally unpredictable situation driven largely by politics and by "o-bulshit".

 

[atticus]

Quote from dhpar:

i did not know i converse with a retard. if i did know that i would not bother. well lesson learned.

and no - i am not suggesting shorting DO against BP (and definitely not suggesting shorting DO outright).
funny you feel it is necessary to defend your trade on ET - you should also start a thread on yahoo boards. LOL

enough said.

Quote from dhpar:

i never suggested you should do any of those pairs - in fact i suggested just the opposite (read my posts).

Edit: Your edit which added the, "p.s. btw stat-arb should have no business ..." doesn't make your arguments less contradictory.

 

[atticus]

Quote from dhpar:

i did not know i converse with a retard. if i did know that i would not bother. well lesson learned.

and no - i am not suggesting shorting DO against BP (and definitely not suggesting shorting DO outright). see my original post (below).

funny you feel it is necessary to defend your trade on ET - you should also start a thread on yahoo boards. LOL

i see you need some head start (to win the bet with yourself against the rest of the world) - is that why you count from Jun-04?

enough said.

June 4th, last trading day before the post was authored... today hadn't happened yet.

In fact, you could have owned the switch at $0.30 lower than Friday's close by simply buying the open on the switch today.

Posted 6/6/10

http://www.elitetrader.com/vb/showthread.php?s=&threadid=200408&perpage=5&pagenumber=12

"There is no long trade in BP at these levels. It's the short-side of the stat-arb and will be until the spread blows out against DO, SLB, SDRL, etc. Why buy BP when you can short it against DO?

 

[Swan Noir]

Given BP's partial success capturing a third or more of the flow (with a reasonable expectation of improvement from here) and the PA it is becoming clear that major players anticipate either a radical dividend reduction (more than 50%) or its elimination.

If its eliminated the stock will probably retreat below 30 and at that point I believe it is a screaming buy. The patient holder will see the dividend reinstated within three years at a reduced rate that will give them at least a 5% return based on their purchase price and by waiting two or three more years (five or six years in total) I believe the dividend will yield 10% or more ... again, based on the original purchase price.

If they eliminate or cut the dividend enough and the price falls below 30 it is a terrific long term income play with significant upside potential appreciation. This is a monster oil & gas producer with significant assets up and downstream in a world starved for energy.

 

[Ghost of Cutten]

Quote from atticus:

Brilliant, providing an analog that had a stat-vol equal to an ON/OFF the run Treasury switch, prior to the blowout. Hey Cutten, how about we place a wager on the outcome?

Outcome isn't the same as risk, so your proposed bet is off-topic.

 

[Ghost of Cutten]

Quote from atticus:

My bet is on price, but I'd also wager that the switch beats outright long BP on price, variance and peak to trough, risk-adjusted return.

But how can it be lower risk (not the same as risk/return ratio) than an outright long? A short leg can go 500, 1000% against you, a long cannot go more than 100% against you. Thus any spread with a non-fungible short leg has more risk (risk being the maximum loss you are potentially exposed to) than an outright long.

You seem to be equating actual price volatility with risk. Pegged currencies have low historic vol before they devalue. VW voting/non-voting spread had low historic volatility etc.

 

[Ghost of Cutten]

Quote from Swan Noir:

Given BP's partial success capturing a third or more of the flow (with a reasonable expectation of improvement from here) and the PA it is becoming clear that major players anticipate either a radical dividend reduction (more than 50%) or its elimination.

If its eliminated the stock will probably retreat below 30 and at that point I believe it is a screaming buy. The patient holder will see the dividend reinstated within three years at a reduced rate that will give them at least a 5% return based on their purchase price and by waiting two or three more years (five or six years in total) I believe the dividend will yield 10% or more ... again, based on the original purchase price.

If they eliminate or cut the dividend enough and the price falls below 30 it is a terrific long term income play with significant upside potential appreciation. This is a monster oil & gas producer with significant assets up and downstream in a world starved for energy.

Why not wait for a true panic in the stock, where investors liquidate en masse, before getting long? That will reduce your risk and boost your return. The only reason to avoid that is if you think no panic selling phase will take place. Given the history of these kind of events, that might be an optimistic assumption.

 

[Ripwave]

It's a buy right now. Just wait to see how this plays out. Bp will raise again