Bill Wexler's Trading Cabana Message Board

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Non-Tech : Bill Wexler's Trading Cabana

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To: RockyBalboa who wrote (3902)	10/7/2008 8:03:30 AM
From: RockyBalboa	Read Replies (2) of 6370

The idea that the volkswagen pyramid game would stop in its tracks (in a weak market) was absurdly wrong. Luckily I did not commit big money to the trade. Options don´t need to be exercised... Today in the middle of the worst stock markets in nearly a decade... volkswagen which moved from 60 to 200 last year and this year, shot from 290 to 450 giving the automotive concern a market cap of over 130B Euros or 175 Billion USD (for its common stock alone; thers also a preferred class out which trades poorly). This was the highest market cap a car maker ever reached, worldwide. The 360 call traded for 105. The bubble already imploded intraday and this option is now quite out of the money. The side effect was that the heavily discounted porsche stub (a paper issued by VWs new owner, porsche) also moved up from low 50 to 68 and it is better tradeable. The intrinsic value of porsche is however, over 100. But as in backdoors, "discount" issues persist. Now, some arbs are in charge and the Porsche stock trades up nicely.

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