<me thinks you will buying back above 90.. you too MH>
Actually, I just bought 500 @ $87-1/2 and sold them at $88-1/2. A little too hasty, perhaps, buy it beats the sickening sinking feeling of holding onto a fortune of RMBS stock while it plunges 10% in a vacuum while the brightest and the most resourceful threadsters are clawing around finding reasons for the drop.
I will be selling my last 1k position in RMBS at around $95 before re-assessing the situation again.
Yes, today's candlestick looks constructive, but I remain cautious. IMO, for those brave souls, the BEST way to capitalize on FUD is to short puts on RMBS. The IVs are very high - for example - you can collect $5-5/8 by shorting the July-90's. Taking the risk of being assigned the stock at $90 twenty days from now is the equivalent of paying $84-3/8 per share.
Actually, I've already sold short a TON of Jan2000 puts on RMBS at strike prices of $60, $70, and $80 - equivalent of taking the risk of being assigned stock at the cost of $54, $60-3/4, and $66-5/8 respectively. Worst-comes-to-worst, I don't mind owning stock at those prices.
Does everyone agree? You can still duplicate roughly the same short-put positions at today's market prices... |
