Jump to content

FFH, Can One Buy Options on FFH as a US Investor


Myth465
 Share

Recommended Posts

I am looking to buy back FFH (now that Hurricane season is passing and they are fully hedged) and dont mind the shares, but would prefer 2 year leaps. Are these going out to 2012 or 2013 going to be available at any point. If they are in Canada how can a US investor buy them.

Link to comment
Share on other sites

I am looking to buy back FFH (now that Hurricane season is passing and they are fully hedged) and dont mind the shares, but would prefer 2 year leaps. Are these going out to 2012 or 2013 going to be available at any point. If they are in Canada how can a US investor buy them.

 

You're not allowed to purchase options on foreign exchanges.  I was disappointed when they delisted from NYSE for this reason.

Link to comment
Share on other sites

Eric is right - can't buy options through fido. Not sure how Buffett got around to buy options in Munich Re - I wanted to do the same, couldnt...

 

 

 

Investment banks will sell you an option on anything, it will just be a one-off derivative contract rather than a standardized "listed" option. Whitney Tilson did this a while ago to get LEAPS on BRK.  For the right price, and if you are a big enough client, I'm sure someone would write you a derivative on FFH, but I doubt it would be worth your while as they would likely charge a high price (high implied volatility). My take is that this was all a lot easier to get done before 2008.  The guys from "The Big Short" (cornwall capital I think) did the same thing to buy 5-8 year LEAPS.

Link to comment
Share on other sites

Eric is right - can't buy options through fido. Not sure how Buffett got around to buy options in Munich Re - I wanted to do the same, couldnt...

 

 

 

Investment banks will sell you an option on anything, it will just be a one-off derivative contract rather than a standardized "listed" option. Whitney Tilson did this a while ago to get LEAPS on BRK.  For the right price, and if you are a big enough client, I'm sure someone would write you a derivative on FFH, but I doubt it would be worth your while as they would likely charge a high price (high implied volatility). My take is that this was all a lot easier to get done before 2008.  The guys from "The Big Short" (cornwall capital I think) did the same thing to buy 5-8 year LEAPS.

 

 

Actually, prices for customized options or synthetic options or other derivatives can sometimes be much cheaper than what's available on an exchange.  It depends on what the counterparty has available to offset the transaction.

Link to comment
Share on other sites

Not that it matters too much, but the hurricane season is really just getting fired up.

 

Sept 10 is about the midpoint of the hurricane season.  However, approaching the midpoint, the geographical risk shifts dramatically from mainly The Gulf of Mexico to mainly Florida and the Atlantic coast as few hurricanes form in the Caribbean and The Gulf while hurricanes forming out of weather systems coming off the coast of Africa become more numerous.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...