short 30x OCT 2.5 straddle at $3.3 long 2600x stock at $2.65 break even between at $0.9 - $25. max loss if goes to 0 $5100. max loss above $25 unlimited. This thing has to be resolved this week, vol will come down. Took a loss of ~5k on the lehman trade, i just dont believe they will wipe out aig too right after leh.
It could end up like a freddie or fanny thing where the company is salvaged, but all shareholder equity is wiped out.
highly unlikely, besides even the fnm/fre junk is trading at ~0.5. AIG worth a lot more (compared to fnm/fre). My downside is well protected. Anyway took the profit and got out after the up move. Will enter again if it drops. Been doing this all day, love this stock. long stock exited at 3.3 short straddle covered at 3.6