GM 1 Strike Puts

Discussion in 'Stocks' started by TM1982, May 26, 2009.

  1. TM1982


    Just sold a ton of these bad boys for .45
  2. You must have sold me some, I just bought a few :)
  3. TM1982


    Are you buying them outright, for a quick scalp? Or for hedging purposes?
  4. Obama is going to bend you over and stick the long arm of the government up your hole.
  5. TM1982


    I look forward to it!
  6. That's quite funny, I did the same thing this morning after the news had a chance to hit the tape. I don't generally like selling options, but these have an absolutely defined max loss to them so it's not a normal situation.

    Also took some GM stock and unsecured debt.

    The reason I came to this is I'm looking for a way to go long volatility on the broader markets without having to (indirectly) buy 700% IV on crap like GM.
  7. Under the just-rejected proposal, at 1 penny a share the company has a post-reorg value of just $1B. IMO that is...not realistic.
  8. TM1982


    Good trade Random, at least I think. Who knows what will happen but I didn't go all in on these, scaling in. Will see where stock treads the next few days, may tick down a little lower, so you can sell a few more at a slightly higher price. The premium will start ticking off these things after this week.
  9. In all the proposed plans the general shareholder value is planned on being at most a few pennies. There are direct statements from the company to this effect.

    The bondholders have absolutely no incentive to prevent bankruptcy for 2 reasons. First because they have a better chance with a judge than with the company, and 2 there was a story out that suggested that the Obama admin is willing to pay the bondholders off in bankruptcy.

    I took the play because I would never forgive myself later if they go bankrupt which I am feeling very certain they will. That's why I took a small "for fun" position so at least I can say I got something if I'm correct and won't lose too much if I'm wrong.

    The way I'm looking at the current share price is that the institutions are keeping it elevated to dump as much as they can before they lose it all.

    Good luck though because it sounds like your position is bigger than mine.
    #10     May 26, 2009