You could use options and thus have no margin call risk. Yet the options are not implying a long-term price of $2. The January 2010 $15 calls for example sold for $2.50 today. The Jan 2009 $10 puts sold for $5.90 on decent size. If it's definitely going to $2 then that's $2 of free money.
What are the risks of shorting Bear at $5?
- Thread starter himself
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You could use options and thus have no margin call risk. Yet the options are not implying a long-term price of $2. The January 2010 $15 calls for example sold for $2.50 today. The Jan 2009 $10 puts sold for $5.90 on decent size. If it's definitely going to $2 then that's $2 of free money.
Throughout the weekend, his team had spent time interviewing senior Bear employees to find out the true extent of the problems in all parts of the business.
The results of those conversations worried Dimon so much that at one stage he is understood to have been happy to walk away, fearful of the effect paying too high a price might have on the bank he has run so successfully for the past four years.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/18/cnbear218.xml
Yeah. It's worth 7.
The results of those conversations worried Dimon so much that at one stage he is understood to have been happy to walk away, fearful of the effect paying too high a price might have on the bank he has run so successfully for the past four years.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/18/cnbear218.xml
Yeah. It's worth 7.
I haven't read all the posts so I don't know if this has been said yet? But even if the deal doesn't go through, along with having the right to buy the bear Stearn's Building, <b>JPM also has the right to buy 20% of BSC shares at a price of $2.</b> There really was no negotiating with this deal. JPM just made the best terms for JPM and the Fed forced Bear to take the deal with no buts about it.
Better read this before you get too involved:
http://dailybriefing.blogs.fortune.cnn.com/2008/03/18/why-bear-stearns-stock-is-in-orbit/
When the stock hit $2 and people bought, it turns out they were smart, but I doubt many of them knew why they were smart at the time.
Danger now is, the people who are buying have a specific reason to buy, and once they are done, they're done, and the stock will probably tank... but maybe not before the stock is absorbed, so it seems to me it's going to be very difficult to predict whats going to happen right at the end of this mess.
http://dailybriefing.blogs.fortune.cnn.com/2008/03/18/why-bear-stearns-stock-is-in-orbit/
When the stock hit $2 and people bought, it turns out they were smart, but I doubt many of them knew why they were smart at the time.
Danger now is, the people who are buying have a specific reason to buy, and once they are done, they're done, and the stock will probably tank... but maybe not before the stock is absorbed, so it seems to me it's going to be very difficult to predict whats going to happen right at the end of this mess.
Bloomberg is reporting (confirmed) that the SEC will investigate trading in BSC shares. That was it, no other details.
This link does not concern the above, but does make for interesting reading.
http://www.sec.gov/news/press/2008/2008-46.htm
This link does not concern the above, but does make for interesting reading.
http://www.sec.gov/news/press/2008/2008-46.htm
Didn't you just post a tear-jerker in Announcements about how you were so happy and thankful to have your posting privileges restored here after getting banned and how you were going to speak respectfully to others from now on?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=120366
