Does it have to do anything with the rumor at the following link?
http://www.investmentmoats.com/stock-market-news/rumor-citibank-and-lehman-tops-exposure-in-carlyle-fund/

Hurray, I am first to comment

Jaldiwin

That does seem odd. I am also amazed at the amount of volume on this stock. Looks like the average was 8 or 9 million shares / day and today was 70.75 million shares.

What the heck is going on?

How do you interpret that information?

Is it actionable?

It's interesting nonetheless. It's tempting to purchase a contract or two. Imaging BSC going belly up and your contracts with a cost basis of $25 turn into a Jeff-inspired HUM profit of over 1000%. Volatility increase is huge too.. .500%? I had seen 400% on TMA but 500% is beyond a wow at this point.

WHO'S WORD????

Jeff, your touch is golden. So what do we do with this information? Oh wait, I will trade my "plan" but what are the choices that you see and how are you going to trade knowing this information?
Thanks for the "heads up."

I would have expected the April volume to be higher given that people would expect the price but give it a little more time to go down. Earnings for them are on March 20th, so them expiring the next day is nice timing.

As they say .... there are no stupid questions so here it goes .... with that much volume, why so little open interest ?? I am really tired but what am I missing ?

Jeff,

We can't tell if they sold the Put or purchased can we? If big $$$ wich would be a sign by the number of open interest, I would look at picking some up in the am solong at it hasn't already jumped down to $0.00.

From the old days... What say you?

MJ

If the rumor is wrong, BSC is a steal.

The Fed's action (200B) was preventing a BIG 5 failure. The"AAA" Agency Mortgages, the gold standard of bonds behind U.S. T's, that Carlyle was holding the fed absorbed.

This is an oppurtunity to buy extreme fear. The 40s put them trading at .5X BV.

Go Broke or Go Home

Jeff, last post you asked if anyone is trading the ES. You do mean E-Mini's right ? If so, I am not but am trying to find the BEST info on how to trade these. It seems like a great daytrading on the S/P Minis, My goal is to start with 1 contract and with sucess work it up to 20, at a $1000 a point it seems to be a great income vehicle with this voliitity. Other than yourself of course, any resources, ideas, suggestions, comments etc etc... THANKS

BTW, the FSLR exercise was the bomb, thank you !!!!

Sean M.,

Let me know when your available and we can set time for lunch.

Stan,

My wife,Kathy, and I attended one User Group meeting -your group (N. L.A. County), but that was just before the holidays. I would like to get back as I have much to learn and the group was great, but time is the challenge.
What is the name of your business in N. Hollywood? I worked in that area a few years ago any chance I was a customer?

If this is a unsubstantiated fear based rumor what about a bullish put spread(25&22.5's)Could be easy $.Seriously is this stock going to be below 25 next thursday.Tomorrow the opportunity may have passed, though.

Jeff,

Definitely something fishy.

I like Jim D's spread idea.

What happens, though, when the Fed cuts 100 basis points, and BSC goes to the moon? :-)

Jeff,
NUE brokeout today. Is it too late to get some calls?

xman,

depends on what your acceptable risk is.I have S/R drawn from 68-68.45ish.

If it were me, I'd wait for a re-test of support before going long.

Thanks Cameron

Intersting article on BSC.Looks like the INSTITUTIONAL players were SELLING the puts not BUYING,taking a bullish position.Makes me feel a little more comfortable about a bullish put spread. For what it's worth. http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_T/threadvie

Jeff,

You think OSIP is a good entry for puts

Guess the link to the article didn't take.In any case it's under the yahoo finance page BSC message board titled,"BSC to rally started today from 50",posted March 14 @ 12:50AM for anyone who has an interest in reading it.Sorry for the technical glitch. Jim D

Jim D. you may be right. The 35-40 bull put spread will yield you 10+% before commissions, and BSC would have to drop 30% for the 40 to start to be ITM. Not too shabby.

Jeff,

I don't see why AKS looks better here. Untrained eye?

EE at about $54.60, or a trendline starting the first dip in feb and touching yesterday's close at $53?

why do you guys write to Jeff. Does he ever respond? I am new to his blog so just wondering. What is everyone's take on what the reactions will be to next weeks earnings for BSC, LEH and GSC? too late to short any of these suckers?

Ben,

I think the post above yours answers your question ;-)

The nice thing about these boards is that there's a very active community, so Jeff doesn't have to spend his entire day replying to everything. There are plenty of traders here that are great teachers as well.

Jeff - surprising that you are giving no opinion or strategy. As an option addict I would think you would see some opportunities when volatility and volume spike in such an extreme manner close to expiration.

For clarity, Jim D and other newbies, the options were bought not sold. It is evident since they are trading at such a high price. Options selling would cause a decrease in volatility and price.

Open interest is a reflection of volume, and updated at the end of the day. You will see the increase in open interest tomorrow.

No your opinion is not obvious. What option strategy do you recommend?
Sorry if the basic questions offended you, just trying to learn.

Well, if the word on the street is that nobody is doing business with them, then maybe you want to buy puts way out of the money, and lots of them. That delta sure does get big real fast when a stock tanks like that. Add a dash of high IV on top and it's a pretty tasty meal if the trade goes your way.

Let's look at the potential reward:
Risk $0.85 per contract
On the 19th, those contracts will be worth...
@45 : $0.66
@40 : $1.55
@35 : $3.25
Add a healthy dose of volatility and your 35 strikes could be over $4.00.

...The day before expiration! Not bad ROI if it works out!

My question is, if the options expire the day after their earnings announcement then is there going to be a market to sell the puts if they increase in value? Or is the strategy to actually excercise the option? Does anyone have any clarity on this?

DEES

DEES,

Options expire Thursday next week, not Friday...

Right. Doesn't that mean I would have 1 day to sell a March option.
Thanks Raimo, I've gotten a lot of good tips from you and the other bloggers. Happy hunting.
DEES

I'm reading that book on Kohler's list, "The Rise and Fall of Long Term Capital Management". You never know, this action in BSC is probably J. Merriweather's and his motley crue's attempt at arbitrage again. Let's see if Russia makes an announcement on Monday about downgrading debt.

Jeff. Thanks for the site. Viva la GOLD.
DEES

Jeff...(re: ownputs)

It's time.. ;)

Dees,

Yes.....

Question
Is there some point where there are no more shares to short?

I'm not understanding how you know if 'they' are buying or selling the puts. Every buyer has to have a seller, no?

And isn't it also true that when the herd mentality is doing something, the other side of that trade is usually the better choice?

DEES
the GLD voo doo, that you doo so well, why stop now

And if there is always a buyer for a seller, the buyer could have been the market maker whom might not have really wanted to buy but had to given that he's responsible for liquidity. Same thing for someone buying, the MM may had to sell regardless.

BSC is a liquidity story, will be minimally affected by a rate cut,IMO

Jeff,

Here's an idea for a blog topic. I apologize if someone else brought it up and I missed it.

Options on Futures - TOS says it is coming, figured it would be something that you may have an opinion about.

The shorts are going to take it in the shorts today!

So how long do we all think the rally will last this morning?

It's bank week

Looks like a bail in progress for BSC.

Tom in SC

With all of the writedowns, can Q1s for financials be any good?

JP Mrgan is backing BSC and the FED is backing JP

BS is up 10% premarket