Oh and Lehman is probably going bankrupt.Man, there is a lot of moving parts tonight, hopefully you have an inkling of the situation.
BAC is a client holding.
Wikinvest Wire
Sunday, September 14, 2008
Crazy Sunday Night!
Oh and Lehman is probably going bankrupt.Man, there is a lot of moving parts tonight, hopefully you have an inkling of the situation.
BAC is a client holding.
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5 comments:
I think the futures have improved a little,,but it still looks like blood in the streets monday, and wallstreet will never be the same again..
could this be the capitulation that is needed? Nothing you can do about tomorrow now, is there?
One course of action in high vol environments: put calendar spreads; volatility will be high in the near term, likely to settle down by T'sgiving. By selling the October (near month) options and buying the Dec/Jan options at the same strike, someone will be overpaying for the premia.
Example, using Friday's prices (no doubt well under Monday's vol-determined prices) buy the Jan JPM 35ps @2.66, Sell Oct 35ps @1.20. If implied vol falls (Oct puts traded at IV=72% on Friday, Jan Puts were at 57%), the near term option should lose more value than the longer term option. Time value should hold the Jan option price (vega is f: 1/time to expiration) even as the approaching Oct expiration flattens the vol curve on the Oct 45.
Hardly riskless; I'd be extremely wary of anyone saying "whew, finally got that done." The fact that Merrill is gone and no one was willing to front for LEH says there are few (if any) balance sheets out there to provide the "capital reparations" necessary to put an end to this mess.
The "long view" is comfortable, but IMO unless you're somehow insulated from financials, there is plenty of pain still to come (i.e., the bottom is still somewhere out there in the future, but hardly "just around the corner").
We are turning Japanese.
I still like my cash and would even sell on monday.
We should get a nice rally staring in 2 to 6 weeks, but do not get fooled into believing that that will be the bottom.
AIG is looking for a bridge-loan to nowhere.
Lehman? There goes my pension!
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