risk free pair trade ==== buy C short BAC

Discussion in 'Stocks' started by apitrader, Feb 10, 2009.

  1. these brothers will be converged to $2, as FRE FNM did
  2. Short both. Comes closer to a "risk free trade" ! :cool:
  3. Daal


    shorting banks should be renamed to 'arbitrage' :p
  4. Daal


    It would have worked today. shorting financials is like picking nickels in front of a ... slot machine :D
  5. LMAO!!! :p
  6. m22au


    In a free market, C and BAC would gradually tumble towards zero.

    However I find it hard to believe that the US government is willing to formally nationalise these two companies, despite already throwing huge amounts of preference shares into the two zombie banks.

    Therefore I think it's possible that a future bailout / insurance for toxic debt would be provided on generous terms, similar to the C bailout from November.

    As sad as it is for US taxpayers, C and BAC shares could rise if/when the next bailout is announced.