Shorting LEH?

How risky would shorting LEH at 0.37 be?

 

you are risking that the bond holders wont pile in into the open to control the BK and get a better recovery

 

You'd be taking on a huge, unknown amount of risk to make, at most, 0.37.

 

Taking LEH from $4.00 to $0 will yield the same % profit as taking it from $0.37 to $0. I'm not saying that it's a wise or bad trade as I wouldn't touch it with your money, but, max. return is still 100% regardless of stock price.

 

True. I meant it terms of the potential move though. It's a lot more likely for a $0.37 stock to double than it is for a $50 stock to. Especially since the 0.37 is a company that just declared bankruptcy and a lot of unexpected things can happen.

 

You wont get a borrow on it and most retail shops wont let you short anything under 5 bucks. And if they did you would have to post $5 margin per share to short it.

 

at 37 cents...thats a pretty hefty near 50% dividend you'll have to pay out.