Back on June 4, we suggested some relatively conservative ways to play the potential downside in Lehman Brothers (LEH). Since we published that piece, the stock has dropped more than 13% to 27.20, and with earnings now behind us it’s time to revisit these positions. LEH July 40/42 call vertical – we initially sold this vertical for a credit of $0.34. You could buy it back right now for about $0.05, locking in a gain of 17.46% return on capital risked. Since…
Saturday, June 14, 2008
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[Members, be sure to check in for the weekend portfolio update.] The Financial Times has a fascinating interactive map of key oil players and movements. Roger Nusbaum profiles one of several forthcoming frontier ETFs. For when BRICs get too boring, you can own some Poland, Chile, and Egypt. Greg Feirman wonders whether Lehman really is bankrupt; in Barron’s, Steven Sears notes that the premiums in LEH options “show that investors think the stock is more than twice as risky as the overall financial sector.” It’s kind of…
Tuesday, June 10, 2008
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The market was flat/down today, discouraged by the news that a certain Presidential candidate would, if elected, “veto every single beer.” Just a gaffe, sure, but did you know that if you drink Magic Hat (pictured) then the terrorists will win? You mean Vermont separatists aren’t terrorists? Whatever. All I know is that they have beards and don’t like Toby Keith. Close enough. The other Presidential candidate has the power to decimate entire industries, just by being. The old journalistic fallback, “Markets…
Wednesday, June 4, 2008
In the days following the Bear Stearns collapse, Lehman Brothers was the favorite target of speculation for traders, especially those who missed the BSC and wanted their own chance to watch some cheap out of the money puts turn into real paper. After it looked like LEH had pacified the concerns of critics, they’re back in the news as everyone on the street suspects the company is in a real double-bind: If Lehman announces to investors that it is raising $3 billion…
Tuesday, June 17, 2008
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