I really don't know why this would be the case. I think any stock could go to 0, or at least .01 or whatever. Realize the the book value of BP, their cash position, all of that and more is going to be pounded by the expenses they are incurring, the 1000s of lawsuits coming, etc. Nothing looks good for BP, because people will demand any profits, etc. go to the Gulf Coast area, even if BP ever does really recover. I just thought of this today as well - what mutual fund is going to want to send out reports showing they hold BP? Not just because of the loss in value, but BP is completely hated by almost everyone now. I think all mutual funds are selling their BP as fast as possible. Don't know how low it will go, but I'm not going to get stuck guessing either. JJacksET4
may be another couple of bucks lower but buying here is good opportunity if you look at weekly bp chat huge h&s pattern and neck line is around $35-36 which gives 5 to 6 bucks upside from here will buy around 29-28 range
http://www.bp.com/sectiongenericarticle.do?categoryId=9033856&contentId=7062596 page 4-7 of the pdf, reminds me of sec explanation of the flash crash. His replacement will be much more entertaining.
I sure hope you are right. I was long July $33 put and sold Oct $25 put against it. I was assuming that the worse will be known in a month or so when I did the option spread. Today, I sold the the July $33 put, leaving the Oct $25 put I wrote "naked" so am anxious about this Chapter 11 news. I won't mind getting BP about $25 or so if it isn't going bk.
Robert, that sucks, I feel for you. I got into BP around the same time as you, near the beginning of this thread. I got 1000 shares @ $37, but I also bought some put protection, I bought 11 July puts with a strike of $40. In total I'm down about $1100, but considering I should be down about $8000 without the puts, I'm pretty happy. And because of my slightly bearish bias with 11 contracts vs 1000 shares, I actually gained $200 on my position today over yesterday. I'm going to hold BP until OPEX in July, in hopes that some good news pops this back up to over $40. I don't think BP will go bankrupt, however, considering how crazy people are shitting on this stock, who knows where it will end up. But BP makes too much money and the US would rather have it around as its lapdog rather than kill it. BP is employing thousands of umemployed people in the South and injecting billions of dollars into the communities, something that wouldn't have been done otherwise, so really this is a win for Obama. Billions of dollars that normally would have gone into the coffers of BP are being diverted into the South, and that's probably the best stimulus package they could ever dream of. If Obama pushes too hard, which I believe he is stupidly doing right now, they very well could kill the goose that lays the golden egg by inadvertently forcing BP into bankruptcy. Politicians laying into BP and trying to force them to cut the dividend is disgusting... since when should the government be telling a business how to run itself? If they do cut the dividend and the share price falls even further, it could really spin the company out of control, which could seriously derail all these efforts, so these fucking politicians should watch themselves.
note that you certainly did not make a wager with me. and in particular not about BP/DO spread... the wager is really done between atticus and atticus and as such you should consider starting a new journal thread - and not polute the thread about BP. we all know you are a smart guy so stay on the topic here. I entered this thread because I thought that this trade is a nonsense from a value perspective. but that does not mean that if I disagree with your trade i would be taking the other side - that's something which is likely over your head. explicitly I said 3 days ago: "yeah sure - must be a lovely pair trade in such a volatility. on top of that there are plenty of possible scenarios where DO goes to hell while BP nicely chimes along..." look what these stock (and the spread) were doing during the past 3 days... LOL. that's what i am talking about. talking the talk is the way ET lives... p.s. BP is up 4 buck pre-market. crazy will short at 32.90s for a quick scalp. SL ~0935ET
Yesterday, near the close, I recommended to a friend to cover BP shorts. This morning, pre-market, BP is nearly at $33. The poor guy looks like he lost all his profits and is looking right at an unrealized loss.