Thursday, December 17, 2009

Citibank Astounding Options Activity, and "An Opportunity Too Good To Miss"

Update from yesterday. Here is the status on the December and January options.

Quite interestingly, there are more calls than puts open, and for January there were far more calls than puts traded:

December 2009, 2.1M calls open, 1.8M puts open:

(please click to enlarge)

January 2010 3.1M calls open, 1.6M puts:

Today I doubled down on the C Jan 4 calls and kept the 2.50 puts.

I am lucky that my cable line-up does not include Jim Cramer, who recommended to buy C on December 14 (humm, 3 days ago?):

Jim Cramer: "tonight I am urging you to take a look at an individual stock right at the top of the show, and I never do that. ... An opportunity too good to miss ... I think you should buy buy buy.... CITIGROUP!... Mooooooh ":

Jail him!

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Douglas said...

Cramer actually said to buy it AFTER the offering. He emphatically said it was a "long term speculative" play too. As he reiterated again today 12/17, it is the ultimate $3 call and if you have a time horizon to 2012 or so, you would have a great buy at this price. If you're buying it as a long term speculative call, it doesn't matter if you bought it at $3.50 or $3.09. And just to make it clear; if you bought the stock and didn't expect some volatility and wild swings, you're not a very smart investor. This stock will be on a rollercoaster for at least another year.

The Shocked Investor said...

Hi Douglas,

Thank you for the comment. To be a little fairer I thought JC said to buy it at the offering, but this was on said Dec 14 and it might have given the impression of the following day. So the Cramerites might have bought on the 15th and they would now be toast. As for holding this for the long term, yes, anything can happen and maybe the US government will forgive them or grant them another $100B in taxes. I would not touch this stock with a kilometer long pole, C should be bankrupt. The reasons JC gives make little sense to me. C has 28B shares. If the stock is to go to $12 as JC says, the market cap would be ~$336B... But hey, what's a trillion these days.

It is a joke of a stock. Some people compare it to KRY.

Straddles, however, are a different story and are working just beautifully.

Just my opinion. I do feel sorry for people who watch this man for anything to do with investment. For entertaining and clowning he is kind of fun.

CEO Trader said...

Cramer will be right until January. Will retail investors have the smarts to get out?

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