Jim Rogers: Citigroup is a buy at $5

Quote from bgp:

i would like to know the ages of some poster's that want to buy CITI ? I'LL BET YOU'RE IN YOUR TEENS OR TWENTIES. not enough wisdom yet. :)
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Mr BGP.

If you believe you have wisdom? Try to answer my question on the Parents with 5 children.

All the Pm's received so far have contained the wrong answer to the question. Perhaps you guys here are NOT as smart as you would have me believe.

Rgrds

The Muppet
 
A question to all members that visited this thread:-

If your parents had FIVE children and they named them DELTA, THETA, DOW, DAX.

WHAT DID THEY NAME THE FITH ONE?

PLEASE SEND YOUR ANSWERS BY PM ONLY!


Regards

Booster
 
DOW FUTRS UP 73

S&P UP 10

NAZ UP 11

The bears on the DOW and CITIGROUP are going to get a real roasting soon and especially in the first quarter of 2008:D :D

Cash mrkts open in under an hour!:D

Bears can you hear the bulls coming?:D :D
 
Quote from boost123:


If the experts BIAS is bearish they DONT BUY 20K worth of CALLS!!

If they are bearish they would buy PUTS with their short 2M shares.:D
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Let's say I've been riding the stock down for the last 50% price move as an "expert". I'm a little worried about a bounce here, so I buy calls to offset my huge net short position.

Short stock + long call = long put

Your expert is now synthetically buying puts by buying calls.

In any case, you have no way of knowing if the calls:
1) were bought or sold
2) were combined with a stock transaction
3) were combined with another option transaction (butterfly, strangle, straddle, vertical are all possible along with many others)
4) offset a previous position

I have no opinion on Citigroup, I'm just pointing out that "large volume" does not equal "big buy".

Large cap stocks (and ETFs) are extremely difficult to intuit what an option transaction means.
 
Quote from FullyArticulate:

Let's say I've been riding the stock down for the last 50% price move as an "expert". I'm a little worried about a bounce here, so I buy calls to offset my huge net short position.

Short stock + long call = long put

Your expert is now synthetically buying puts by buying calls.

In any case, you have no way of knowing if the calls:
1) were bought or sold
2) were combined with a stock transaction
3) were combined with another option transaction (butterfly, strangle, straddle, vertical are all possible along with many others)
4) offset a previous position

I have no opinion on Citigroup, I'm just pointing out that "large volume" does not equal "big buy".

Large cap stocks (and ETFs) are extremely difficult to intuit what an option transaction means.
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Large vol means there is activity on the stock and some peeps know something is about to happen so they place options positions before it happens NOT after it happens.:D
 
Quote from boost123:

Large vol means there is activity on the stock and some peeps know something is about to happen so they place options positions before it happens NOT after it happens.:D
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Maybe. It might also mean:
1) A pairs trade became profitable
2) An offset occurred for tax reasons
3) A portfolio is being hedged
4) A beta-neutral trade was engineered
5) Gamma was being neutralized

or a dozen other things.

In any case, think about both sides of the transaction. Let's say you're right, and someone pounded the ask for those 20k options. Someone else had the financial means and motive to sell those 20k options. What makes you think the expert is the one buying the 20k, and the idiot is writing the 20k?

The bottom line is, in these large caps, you have no idea what the pre-existing position or combination trade was. Buying synthetic puts (short + call) may make sense in a variety of situations (dividends for one). It may also make sense to use a high-beta ETF as a proxy for stock if the skew is right. (short ETF + long calls in C)
 
" What makes you think the expert is the one buying the 20k, and the idiot is writing the 20k? "

The M Maker is under obligation to MAKE a market on all strikes.
And if i want to BUY 50,000 or WRITE 50,000 contracts the market maker has to take the other end of trade. All that maters to me is that my end wins and i dont care what the MMker does with his end.
I believe that Citigroup is oversold and all I'm saying is that i believe i have the advantage with LONG atm CALLS in Mar contracts. Plus i cant lose more than the premiums i paid for positions. In other words my bias is bullish not bearish on Citi.

I dont care about all the other players positions and volume on Citi options contracts if they are Fly's or calendars or log/short PUTS/CALLS, Iron Condors, Strangles or Ratios. I only care about my positions and whats causing Citi to fall 50% in value and the activity on stock options.
I can afford to take a loss if I'm wrong as its only a limited loss to prems paid.
 
Reminded me of the value play of Boston Chicken :)

Or, umbrella plays like Cisco, Nortel who keep buying other firms to grow their books.

MCD mentioned here does not do umbrella tricks, C does.
 
I think what Jim Rogers meant is that it is too earlier to buy C or any other banks now. C will likely go to 20, 10. Exactly how low no one knows.
 
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