Wacky trading in C today. What's that a 40% intra-day range? I'd like to see Jack Hershey capture 3x THAT intraday range!
C was huge !! I maxed out BP all day trying to short this hunk of shit. That trade was almost as easy as AIG when their revenue was cut by 50% (yet they claimed everything was fine) a few or more months ago. And even thoe all these dumbass ceo's (ken lewis needs the full metal jacket treatment) are telling you they will be proffitable, dont believe the hype. Sure they will be profitable, if you dont include the writedowns, and mark to market disasters, and banks do not include "one time charges" aka write downs, aka mark to market losses, in their forcasts. But guess what? Thats where almost all their losses were incurred in the past. So at the end of the day they are all broke as fuck and need tons of governement assistance.
Trying to give others a trade and you don't even provide an explanation for what may be going on behind the scenes? Here are some tid-bits that may or may not mitigate some guesswork: http://2.bp.blogspot.com/_FM71j6-VkNE/ScGdbpmIc-I/AAAAAAAABd4/t_oK5iPjNtY/s1600-h/C+ARB.gif Per ^ CIX: [C common share]*7.31 [0.95 price adjustment] - [C AA preferred share]. Many funds were likely shorting ~7.7 shares common per preferred 2-3 weeks ago...it "appeared" a good arb was in play. Since end of Feb, C Preferred VWAP ~$9.40. Common VWAP $1.86 (current sp $2.6). Average, sold 7.31 common $1.85, cost $13.6. Cost of preferred $9.4. Common worth $21.2 = $7.6 loss on common side of arb, with preferreds making $6.5. Net loss $1.1 per common traded plus borrowing costs. Approaching 14 billion traded from end of Feb. and you can bet a pretty penny the arb soaked up at least 30-40% of vol. Some HF's may burn to ground after this event. Forced arb short squeeze of VW proportions. Government aid used to force squeeze?
And yours is a great explanation if I may say so. That difficulty to locate and high financing cost gives their shorting game away rather clearly in June 2.5 and 5 conversions... hardly straight lines, are they? The degree of inefficiency not seen since 2007... Double-digit riskless gains for the mouse-driven trader, much to the co-lo crew dismay But wait. Good advice - possibly the only one in the entire Hull's options tome, which can give us mortals some edge over hedgies... Never join (and resist fading) a 'popular' trade (so popular that you've actually read about it - like this one here