Credit Spreads on AIG

Discussion in 'Options' started by adam772, Sep 21, 2009.

  1. adam772


    Anyone selling the OCT spreads? what strikes? looks like the 70/75 or 75/80 bear call spreads can make some good money - i doubt AIG will see over 75 by OCT expiration.

  2. wartrace


    Seems to be a conservative trade, A little over 90% chance it will be successful & a 7-8% return on risk.
  3. adam772


    what the heck- AIG continuing to run!!

    waiting to pull the trigger on the credit spreads.....
  4. wartrace


    Might not go any higher. Asking the federal government for more favorable terms & an analyst upgrade to 45. All that action is doing for you is pumping up the premiums.:)
  5. I dunno, mate. $8 up today alone.
  6. adam772


    did this last month- ran up to 55 or 56 on that short squeeze....

    credit spreads were the only real way to go....shorting the common stock too dangerous here...just amazing how fast that monster moves...

    would definitely look into selling credit spreads way out of the money on aig...not likely that it stays so high for expiration...
  7. With the 1:20 reverse split shrinking the float and the huge volatility, you might not want to take too large of a position on those bear call spreads. It can blast through into the 70s with no problem, even though fundamentals might not support such a move.

    Good luck.

  8. adam772


    i would keep an eye on this one....the premiums are going to be quite rich..
    it would need to move another 40 to 50% higher...

    the 70/75 and 75/80 bear call spreads do look tempting...

    Going to wait and see how it opens and trades....kudos to whoever had the guts to hold AIG overnight...
  9. Hate to say it, but AIG could go to 150 before all the short interest is flushed out.
  10. adam772


    highly doubt aig will go to 150....right now in freefall - down to 46
    #10     Sep 22, 2009