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commiebat
Registered: Sep 2007
Posts: 339 |
01-07-08 02:08 AM
Quote from newguy05:
i like chris' idea, buy the 2010 $5 call at $1.2. Basically if etfc doesnt go bankrupt, it should bounce back. If it does go bankrupt, you lost 1.2 instead of 3.2 (underlying price)
If it does go bankrupt, you lose your entire investment instead of your entire investment. And if it doubles, you make 17% instead of doubling your money.
So just how high do you expect this turkey to fly?
Spin has it right. Buy the $0 call. There isn't even any time premium in it.
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newguy05
Registered: Oct 2007
Posts: 1763 |
01-07-08 02:20 AM
Quote from commiebat:
If it does go bankrupt, you lose your entire investment instead of your entire investment. And if it doubles, you make 17% instead of doubling your money.
i dont understand, i can buy 100 share for $320 or 1 contract of 2010 5 call for $120. If it goes bankrupt, i lose $120 instead of $320?
The doubling is true but only if it doubles by expiration at 2010 jan. Also you would only lock $120 instead of $320 for 2 years, leaving you with $200 extra to invest in others.
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marketfly
Registered: Jan 2008
Posts: 6 |
01-07-08 02:26 AM
Quote from commiebat:
If it does go bankrupt, you lose your entire investment instead of your entire investment. And if it doubles, you make 17% instead of doubling your money.
So just how high do you expect this turkey to fly?
Spin has it right. Buy the $0 call. There isn't even any time premium in it.
Hey jack ass, with that logic what if it gets bought for $10??? The calls would go up 400+% and you would only be risking a third of capital.
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busajimmy
Registered: Jan 2008
Posts: 24 |
01-07-08 05:36 AM
With Citadel in at 2.5B, I can't see BK happening, especially with all the institutions positions. I say it's a shakedown for the long. A market correction, they are still very strong. I can see ETFC hitting 7-8 . Possibly 10 or better for the long...
any thoughts?
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spindr0
Registered: Nov 2005
Posts: 4166 |
01-07-08 07:08 AM
Quote from newguy05:
i dont understand, i can buy 100 share for $320 or 1 contract of 2010 5 call for $120. If it goes bankrupt, i lose $120 instead of $320?
The doubling is true but only if it doubles by expiration at 2010 jan. Also you would only lock $120 instead of $320 for 2 years, leaving you with $200 extra to invest in others.
Are you investing in ETFC to make money or not to lose money?
2010 $5 call has a delta of approx 2/3 with a 20 ct spread. Stock must go up 30 cts to break even. Stock has one ct spread. If I were bullish on this POS, with a one cent spread in the stock, I'd trade it silly for the next two years.
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