Monday, March 5, 2007

Lehman (LEH)

Among the largest in mortgage securitization. I went with the LEH March 70 puts today as the XBD showed further deterioration. I almost bought BSC puts as well, but just too expensive. I looked at a bunch of subprimes and prices were just too high to jump in to some of the others that I haven't played. Lehman soundly violated its 50 week moving average today. Last time that happened the stock was good for a further slide of more than 10 percent toward its 100 wk. Weekly RSI has also clearly broken down and MACD is looking terrible as well.

I also looked at McGuire Properties (MPG) and will keep an eye on that one. Merrill today noted that NEW is about to become MPG's 2nd largest tenant, so bankruptcy at NEW would be a bad thing. MPG fell 3%. There was volume of only 300 contracts on the MPG March 35 puts, but that was on ZERO open interest. I stayed away because volume was still very low. OI on many options is zero for MPG.

4 comments:

nathan said...

jim-

what's the deal with the AHM dividend declaration? the whole industry is tanking and they are upping the dividend? can they afford this? just seems odd at this time...

Jim K said...

Nathan... been out, I will check it out a little later.

Jason said...

you guys probably saw this but was informative so I thought I'd post it...

http://www.pimco.com/LeftNav/Featured+Market+Commentary/FF/2007/GCBF-+March+2007.htm

Victor said...

Did you maintain your LEH MAR puts today as LEH rallied strongly along with other financials - I closed my CFC short, although I think I should have held on - let us know