Jim Cramer Badly Burned on CIT Call: Stock Crashes, Straddles in Play

CIT is down 38% on reports a deal with bondholders will wipe out the current common shareholders."

Another case for straddles, there seems to be a lof these recently.

Jim Cramer apparently told his viewers to buy CIT yesterday:

"Yesterday, market pundit Jim Cramer made a ridiculously awful call on embattled lender CIT (NYSE: CIT). Cramer made a call to buy CIT stock yesterday".

There are two different plays here, strangles out-of-the money 1s and 1.50s, and in-the money's 1s and 1.50s. Interestingly, they need about the same maximum move.