ok, enough comlpaining about BP- let's talk about price action... BP has "successfully" covered the main leak and has collected over 6000 gallons already from it- does this move the stock on Monday's open?
short bp gas station franchisees, ouch. They are gonna get screwed big time. Its hard to calculate the political risk here, staying away from bp, would invest in a proxy such as su, herc, etc. Plenty of risk to go around. If I had to invest here I would sell deep out of the money puts and pray for worse news. Hayward could not be any less animated, we know your english but show some fucking emotion, maybe Matt Damon could offer some acting lessons.
WOW you got 1142 posts under your belt and still dont have a clue on what you are writing. My dad use to say "flow of words is no proof of wisdom". When you write calls, you are effectively short of the market.
There is no long trade in BP at these levels. It's the short-side of the stat-arb and will be until the spread blows out against DO, SLB, SDRL, etc. Why buy BP when you can short it against DO?
Sell call options, and if the stock keeps falling, then force you to go long on it at your price, if its price wouldn't go any lower, you will keep the premium and walk away. Just that simple.
I was wrong and got it mixed up, sell call to against your long potions, sell put options to load up the stock at your price.
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... SLB is likely much better fit... p.s. btw stat-arb should have no business in this whatsoever. this is a structural change, news driven and totally unpredictable situation driven largely by politics and by "o-bulshit".
I know anyone including myself can make a mistake. So with that being said I don't mean to pound on this to hard but seriously if your mixing up what puts/calls are with options do you know what the greeks are and especially what the IV is? If you can't explain what the current IV is in relation to yesterday, a few days ago and further back as this stock has fallen you STILL should not be touching options. In a nutshell the stock does NOT need to change in price for the price of options to change and just because the price of the stock changes does NOT mean the price of any given strike/exp date will change. If you don't believe you know MORE than your counterparty perhaps not making a trade and just sitting back and learning as much as you can for the next one (stocks crash all the time so its not like this is a one time thing) is the best course of action. Best to all and FWIW I am short a few puts going into Monday but I also have done well with BP being both long and short at times. BP may have some more to go down but absent another "problem" on a large scale I think BP is hitting pretty high on the fear index so (hopefully) most of the weak hands that wanted/needed to sell are gone. So even if it does fall further I don't believe it will stay down here or lower for long. They may have paid out a billion last month over this spill but they still made a profit for the month. At this rate even if it takes until Aug to end the leak they still may not have a loss in any given quarter over the spill. Combine that with the amount they can borrow and how long it will be before they have to cut any checks that mean anything and you can't really ask for much more of a short term sale on a stock from my seat.