The Credit Crisis Financial Stocks Short Journal

Lockhart being predictably hawkish out there, but he's a non-voter.

*LOCKHART: `TIME IS APPROACHING' TO WEIGH RECALIBRATING POLICY
*LOCKHART SAYS RATES MAY NEED TO RISE AMID HIGH UNEMPLOYMENT
 
Quote from Martinghoul:

Lockhart being predictably hawkish out there, but he's a non-voter.

*LOCKHART: `TIME IS APPROACHING' TO WEIGH RECALIBRATING POLICY
*LOCKHART SAYS RATES MAY NEED TO RISE AMID HIGH UNEMPLOYMENT
More...

Hey Martin,
how are you positioning yourself for the next 1 or 2?
 
Trying to be as cautious as I can. Only very high conviction trades. Among the main views: continued dis-inflation in Euroland; continued high inflation prints in the UK; outperformance of Swiss and Swedish economies vs their European counterparts. I am relatively bullish on the US eco, but still believe rates will remain low for a long time to come. Not sure what else I can add to that.
 
Quote from Daal:

I'm unloading Aug and Sep this morning. Still keeping the Dec in(the largest position). I'm considering selling before the number and buying after
More...

The Dec are trading at 99.67 - current max upside of 10 or 11 ticks. Assuming a blowout number, what might you expect them to drop to? At what level are you a buyer again?
 
One serious possibility of profiting from the BP is to short puts at levels that would make the stock a huge bargain
http://www.growthstockwire.com/archive/2010/Jun/2010_Jun_03.asp?printdoc=print

I like this trade, yes you lose a lot if BP goes bankrupt and people who follow the risk reward religion tend to not like that. But there is a price for everything. In this trade you make $150 and stand to lose $2000 if the stock is a $0(actually $1850), so according to my math(which could be wrong), it seems that there is an 8% chance of a $0. That seems insanely high, the company has $91b in assets($71b tangibles) against $32b in debt, plus strong cashflows, its worth way more functioning rather than liquidated, which means it would get bought out on the way down.
The only thing that I'm not a fan of is the margin that it ties up but I'm considering picking up some premium here
 
Quote from ralph00:

The Dec are trading at 99.67 - current max upside of 10 or 11 ticks. Assuming a blowout number, what might you expect them to drop to? At what level are you a buyer again?
More...

I'm a buyer at current levels, its just that I'm nervous about NFP reports, they tend to be asymmetric, the drops are usually massive and gains small but everyone knows that, maybe its already in the price. I have no clue what they will do tomorrow
 
Quote from Daal:

One serious possibility of profiting from the BP is to short puts at levels that would make the stock a huge bargain
http://www.growthstockwire.com/archive/2010/Jun/2010_Jun_03.asp?printdoc=print

I like this trade, yes you lose a lot if BP goes bankrupt and people who follow the risk reward religion tend to not like that. But there is a price for everything. In this trade you make $150 and stand to lose $2000 if the stock is a $0(actually $1850), so according to my math(which could be wrong), it seems that there is an 8% chance of a $0. That seems insanely high, the company has $91b in assets($71b tangibles) against $32b in debt, plus strong cashflows, its worth way more functioning rather than liquidated, which means it would get bought out on the way down.
The only thing that I'm not a fan of is the margin that it ties up but I'm considering picking up some premium here
More...
would a buyer of BP be buying all the future liability for the present
 
Of course the key to shorting that put, is to size the position in a conservative way and be comfortable with the max downside as well, be aware of how it impacts the margin, just pick a $1 in the ground rather than try to get rich
 
if there are 10 years of lawsuits for the damages in the gulf, would the new buyer be on the hook,i can't believe bp could walk away by selling the company and i dont know why a buyer would assume the liability
 
You must log in or register to reply here.
Back
Top