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Strategies & Market Trends : Short Selling, Dark Side, Bubble Busting Laboratory

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To: ild who wrote (62)4/20/2005 12:10:35 PM
From: zebra4o1  Read Replies (1) of 361
 
Could Moody's follow in Ambac's footsteps? I've had some LEAP puts on Ambac for almost a year, thinking they might get hit with a lot of claims (Doug Noland's concern). But instead they took a hit on the revenue side. If bond issuance is slowing down, shouldn't Moody's revenues go down too? They make most of their money from fees for rating bond deals. Moody's puts are cheap - of course the LEAPS are not very liquid.

Any comments on the advantages/drawbacks of using LEAP puts to bet on a housing crash/credit bubble burst? So far I am just breaking even with this strategy - took some big hits on 2006 LEAPS which I bought way to early.
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