Fnm Fre

[SteveD]

I don't understand why people are still short these stocks....

If you have been short since $30, take your profit and move on...your additional profit is fixed at $4.50/share for FNM????


Take your profit and move on....


SteveD

 

[m22au]

I agree that there are some good reasons why the stocks may not go to zero.

However assuming a significant capital raising ($10b plus), then the stocks may be under $1 - especially FRE.

Quote from Daal:

stock almost certainly wont to go $0.00, meaning it wont be worthless(because they wont file for bankrupcty)
-shareholders can sue the government and get some kind of recovery
-if the treasury tries an acquisition bill miller and other managers will try to vote the deal down(claming the regulators,bernanke, paulson recently said they were solvent)
-if its preferred, there is still 'hope' that the stock one day will be worth something when housing recovers and the government is repaid. equity is supposed to be worth the cashflow you can take out over 50-100 years

 

[GTS]

Quote from SteveD:

I don't understand why people are still short these stocks....

If you have been short since $30, take your profit and move on...your additional profit is fixed at $4.50/share for FNM????

Take your profit and move on....

Yea, it would seem that at these price levels shorts have a lot more to lose than longs. It wouldn't take much to cause a spike up (albeit temporary)....a carefully worded PR or perhaps even a rumor.

Edit: Both stocks down another 15% already this morning...amazing.

 

[m22au]

Some people shorted at prices lower than $30, and think the stocks are going lower

Quote from SteveD:

I don't understand why people are still short these stocks....

If you have been short since $30, take your profit and move on...your additional profit is fixed at $4.50/share for FNM????


Take your profit and move on....


SteveD

 

[rros]

Quote from GTS:

Yea, it would seem that at these price levels shorts have a lot more to lose than longs. It wouldn't take much to cause a spike up (albeit temporary)....a carefully worded PR or perhaps even a rumor.

Jim Rogers said he covered all his financial shorts. Then, he added 'almost all of them'. Looks like some are moving on...

 

[Cutten]

Quote from SteveD:

I don't understand why people are still short these stocks....

If you have been short since $30, take your profit and move on...your additional profit is fixed at $4.50/share for FNM????


Take your profit and move on....


SteveD

If the risk/reward from the current price is favourable, why would you not want to make that trade?

Shorting from $30 to $0 provides exactly the same profit as shorting from $4.50 to $0 - 100%. And of course you can use puts instead.

The numerical price of a stock is irrelevant - all that matters is the % move.

 

[GTS]

Quote from Cutten:

If the risk/reward from the current price is favourable, why would you not want to make that trade?

Shorting from $30 to $0 provides exactly the same profit as shorting from $4.50 to $0 - 100%. And of course you can use puts instead.

The numerical price of a stock is irrelevant - all that matters is the % move.

I disagree. Shorting from $1 to $0 produces the same profit as $30 to 0 but the risk of an sudden and large move against you is much worse when you short at $1 (e.g. a sudden move to $3) vs when you short from $30 (a sudden move to $90 is not likely)

The absolute numbers do matter, especially when you are down in the low single digits.

 

[ES Master]

There is nothing but risk. The do not have enough money to survive. And the only way the are going to get it is by Gov. takeover. It is the only way to avoid a complete and utter banking and dollar collaspe.

Treasury will wipe out the common stock and thus it should be. There is no value left and if you are a speculator that can't see the writing on the wall and/or READ A BALANCE SHEET, then that is your problem. Any kind of rescue that would benefit shareholders would be considered morally wrong and meddling with a "free market", treasury wont go there.

Stock goes to ZERO, the market reflects that. Gov. takeover whithin days.

 

[GTS]

Quote from ES Master:

Any kind of rescue that would benefit shareholders would be considered morally wrong and meddling with a "free market", treasury wont go there.

BSC?

 

[Daal]

Quote from GTS:

I disagree. Shorting from $1 to $0 produces the same profit as $30 to 0 but the risk of an sudden and large move against you is much worse when you short at $1 (e.g. a sudden move to $3) vs when you short from $30 (a sudden move to $90 is not likely)

The absolute numbers do matter, especially when you are down in the low single digits.

but if you wait for that massive rally then you take the risk out of the equation(assuming you are right on the value of the stock)