Thursday, February 8, 2007

The NFI Puts

I've taken a few off the table in the March NFI puts I picked up yesterday after they doubled earlier in the day, but still leaving 30% more than houses money on the table this time around. There's still a good amount of time left to see what happens in the coming weeks - they haven't even hit the 17-1/2 strike price yet and I think NFI will swoon below that point. Judging from options activity in other large names in the space, there's more blood letting to come. Wouldn't 1x book value be reasonable for NFI pending clarity on its outlook? Who knows. As I've noted before, this blog is not set up as a live trading blog, and if I deem necessary, I may pare the position further without notice.

Incidentally, Marketwatch columnist Herb Greenberg theorizes NFI apparently didn't set reserves aside for securitizations. http://blogs.marketwatch.com/greenberg/. That would be bad.

BMC put volume... hmmm, not encouraging for longs going into earnings.

2 comments:

mike said...

Thank you for your post. I got in on 5 NFI feb20 puts @.85 and fot out @ 2.00 so I more than double in one short trade. Great blog. On the brlc feb10 i am holding to opex to see if the stock can rally.

Thanks again

Jim K said...

thanks for reading, Mike!