Monday, January 4, 2010

Profit With Citibank Stock in 2010 - Up or Down

Citibank has billions of shares outstanding. It is in deep trouble but too big to fail ($30T in derivatives, imagine if it went under), however, it is clear that something has to happen with it this year. Likely it will be split into smaller units. What will happen to the stock price is a wild guess. We'd like it to move, either way. Here is why.

Here are straddles for various timeframes in 2010. With these, an investor can profit whether the stock goes up or down (as long as it moves). Because C is sitting close to the middle of $3 range, the premiums are very low, but the moves required are around 20-30%. Beware that if C manages to stay in that 3-4 range, then the straddles will be a complete loss.

These are computed wiht our StraddlesCalc tool.

This is not advice. Please do your own due diligence.

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