At what price BP?

[Robert Weinstein]

Quote from atticus:

I don't understand why you're long stuff like this, there is no MR potential here. Please do not short puts, even though they're 90 on the vol-line. Today the stock lost nearly what's in the July ATMs.

Actually the IV collapsed yesterday and so I covered most of the puts. I currently have calls and puts written (calls are way way OTM)

There is IMHO a lot of potential here but I think the management is trying as hard as they can to prove you right or maybe your right about the management. not sure which.....

Once they put a tampon in that bitch and the news turns to what ever the latest DC crap that the media fixates on the average American will quickly forget were to find the gulf of Mexico on the map and the stock will bounce as people will not be afraid they will get their face smashed in. Those that are there when it happens will get the choice cut of meat IMHO

 

[Robert Weinstein]

Hey NoDoji,

You also have stocks like GE that traded around $6 about a year ago and LVS that went from over $100 to under $7 and the CEO had to inject a huge amount (I am thinking north of$200M) but the sun is shining on those two as well right now.

This oil leak more than likely IMHO will get stopped in less than 90 days and significantly reduced within 30 (both dates way longer than it should be IMHO and shows that management could be replaced by boy scouts and show better progress and higher attention to detail and planning. BTW, no offense to the boy scouts either as they would never fck up something as bad as this)

Quote from NoDoji:

I show BP's 10-year low at 33.70. Today it nearly broke through that level. If it breaks through, then there's no definable support. BP's fundamentals aren't much to write home about either (quick ratio of .75x) .

When a stock has no definable support, and nothing but bad news on the horizon, I don't see it as a long term income play with upside potential.

DRYS broke down one long term support level after another in 2008 (their fundamentals were also dismal), broke it's all-time low of 8.50 and traded below 3.00 less than a year after trading well above 100.00. It's not much above 3.00 now, more than another year later and despite an "improving" economy.

 

[Robert Weinstein]

Quote from S2007S:

Saw this news today which is simply insane!!!!


The depth of the Gulf of Mexico oil spill's economic devastation in Florida is beginning to take "terrifying" shape in the predicted loss of 195,000 jobs and nearly $11 billion in revenue.

I don't doubt some loss but I would equally not doubt that the news either picks numbers or picks people that will say numbers to make a headline.....

I also don't doubt that many of the operators are secretly thanking their personal gods for this mess so that they can claim loss of business and get some money from BP. We are in a down economy and I would guess that the hotels would not be full with or without the spill. Although I have read that a lot of people are being put on the payroll of BP in the aid to clean up and other things. For some this has turned into a good thing (I am not saying that it is right or wrong just that some people are making money that they would not have if it was not for)

 

[atticus]

Quote from S2007S:

BP bought “oil spill” search terms on Google, Yahoo, and Bing search engine, which when clicked on, redirect traffic to their official website.

wtf are you talking about? It is not being redirected. The sponsored link clearly shows bp.com in the URL. Think before you type, and stop listening to Anderson Cooper. He knows less about the internet than George Bush.

http://www.google.com/search?aq=f&sourceid=chrome&ie=UTF-8&q=oil+spill

 

[atticus]

Quote from Robert Weinstein:

Actually the IV collapsed yesterday and so I covered most of the puts. I currently have calls and puts written (calls are way way OTM)

There is IMHO a lot of potential here but I think the management is trying as hard as they can to prove you right or maybe your right about the management. not sure which.....

Once they put a tampon in that bitch and the news turns to what ever the latest DC crap that the media fixates on the average American will quickly forget were to find the gulf of Mexico on the map and the stock will bounce as people will not be afraid they will get their face smashed in. Those that are there when it happens will get the choice cut of meat IMHO

OK, ATM vols dropped from 90 to 84% from Friday to Monday. That argument is negated once you sell vol at 80%, or wherever it opens tomorrow, as you know you're likely to trade the puts again. 600bp in vol equates to 30 cents on the ATM strike for July.

 

[FanOfFridays]

Quote from Robert Weinstein:
I also don't doubt that many of the operators are secretly thanking their personal gods for this mess so that they can claim loss of business and get some money from BP. We are in a down economy and I would guess that the hotels would not be full with or without the spill.

Sorry, Robert, but I don't believe this for a second. These businesses aren't going to get any sort of blank cheque from BP. How many tourism-related business could conceivably make such a claim? BP would never be able to fulfill such claims in their entirety, along two coasts. No tourism operator is thanking their lucky stars for a disaster like this, which could affect them for the next few or more years, just because they think they're going to get a class-action generated cheque sometime in 2015.

 

[Robert Weinstein]

Quote from atticus:

OK, ATM vols dropped from 90 to 84% from Friday to Monday. That argument is negated once you sell vol at 80%, or wherever it opens tomorrow, as you know you're likely to trade the puts again. 600bp in vol equates to 30 cents on the ATM strike for July.

Maybe it was IB reporting wrongly but it appeared to be right based on price of BP compared to the options but looking at the OTM front and one month back I was seeing mid 60s to 70s and I dont recall seeing any 84% or I would have been a writer. I didn't look all day today but I was looking a lot yesterday as I wanted to be writing.

 

[atticus]

Quote from Robert Weinstein:

Maybe it was IB reporting wrongly but it appeared to be right based on price of BP compared to the options but looking at the OTM front and one month back I was seeing mid 60s to 70s and I dont recall seeing any 84% or I would have been a writer. I didn't look all day today but I was looking a lot yesterday as I wanted to be writing.

Yeah, I was looking at TOS' AIV which includes skews (worthless). Anyway, vol is high on deciles, but not in relation to the stat-vol of this monster. Good luck.

 

[hippie]

With the stock falling to almost nothingness ?

 

[Swan Noir]

DRY's business model (or at least the spot portion of it) evaporated in the financial crisis. BP earned over 20 billion last year and before extraordinary expenses related to the gulf will earn 15 to 20 billion this year. When (not "if" in my mind) they cut or eliminate the dividend (and I suspect they will eliminate it) it will be a political decision and not a financial one.

This is a concern that owns vast reserves of a commodity that the world needs today and will continue to need for many more tomorrows. It has extraordinary earning power and at crucial moments in the coming months will have the full behind the scenes support of that "special relationship" ally the UK government.

This is not a shipping company that can't earn enough for dinner during a contraction. This is an empire onto itself. It is beset with problems and should not be touched before the dividend is cut. But once that happens and the stock settles there will be significant value here. This company is the real deal. It is their PR moves that are pathetic not their business model which survives intact. They have assets and earning streams with enormous value and, while I have not even looked at their quick ratio, they will survive any liquidity crunch because the Bank of England will do whatever it takes to keep them liquid.

THEY EARN VAST SUMS DAILY ... most of those who get into trouble do not.

Quote from NoDoji:


DRYS broke down one long term support level after another in 2008 (their fundamentals were also dismal), broke it's all-time low of 8.50 and traded below 3.00 less than a year after trading well above 100.00. It's not much above 3.00 now, more than another year later and despite an "improving" economy.