Discussion in 'Stocks' started by dumpandbasher, Sep 15, 2008.
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.
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