ourkid8 Posted October 14, 2013 Posted October 14, 2013 Anyone looking at the BAC/AIG 2016 options which began trading today? TKs, S
nkp007 Posted October 14, 2013 Posted October 14, 2013 Yes, I am taking a look. Thanks for the heads up!
vpagano Posted October 14, 2013 Posted October 14, 2013 Kicking myself a little for not getting any this morning when they were cheaper but anything macro (or earnings) could make them much cheaper anyway. We shall see. BTW, MBI 2016's started trading as well.... a current hated name for some of us around here :p
racemize Posted October 14, 2013 Posted October 14, 2013 I've added the BAC 2016s to my spreadsheet, for anyone interested: https://docs.google.com/spreadsheet/ccc?key=0AhTPR9eP5nWedEF1SGVLdllJTnBMSDMzM3lYZ2d0SlE&usp=sharing
xtreeq Posted October 14, 2013 Posted October 14, 2013 I've added the BAC 2016s to my spreadsheet, for anyone interested: https://docs.google.com/spreadsheet/ccc?key=0AhTPR9eP5nWedEF1SGVLdllJTnBMSDMzM3lYZ2d0SlE&usp=sharing Great, thanks.
Uccmal Posted October 14, 2013 Posted October 14, 2013 No hurry right now. I want to see lower prices.
benchmark Posted October 15, 2013 Posted October 15, 2013 I've added the BAC 2016s to my spreadsheet, for anyone interested: https://docs.google.com/spreadsheet/ccc?key=0AhTPR9eP5nWedEF1SGVLdllJTnBMSDMzM3lYZ2d0SlE&usp=sharing Great, thanks. Thanks. According to this spreadsheet, JPM is actually cheaper that BAC?
racemize Posted October 15, 2013 Posted October 15, 2013 I've added the BAC 2016s to my spreadsheet, for anyone interested: https://docs.google.com/spreadsheet/ccc?key=0AhTPR9eP5nWedEF1SGVLdllJTnBMSDMzM3lYZ2d0SlE&usp=sharing Great, thanks. Thanks. According to this spreadsheet, JPM is actually cheaper that BAC? The cost of leverage is lower, but you have to consider what the growth of the common will be. BACs common growth should be much greater than JPMs (assuming the board is right here).
balancesheet Posted October 15, 2013 Posted October 15, 2013 racemize, thanks for the spreadsheet & updates.
racemize Posted October 15, 2013 Posted October 15, 2013 racemize, thanks for the spreadsheet & updates. No problem. I personally just rolled my BAC 2015 10s to BAC 2016 12s.
benchmark Posted October 15, 2013 Posted October 15, 2013 racemize, thanks for the spreadsheet & updates. No problem. I personally just rolled my BAC 2015 10s to BAC 2016 12s. Hi Racemaze, Looking at the data, can you explain the switch over point? is it a share price at which point that the warrant/option would yield the same return as the common? Also, why not BAC 2016 10s? isn't it better (i.e., have a better return with your velocity term)? Sorry for the newbie questions if it's been asked before (or you can point me to the right reading material). thanks.
racemize Posted October 15, 2013 Posted October 15, 2013 racemize, thanks for the spreadsheet & updates. No problem. I personally just rolled my BAC 2015 10s to BAC 2016 12s. Hi Racemaze, Looking at the data, can you explain the switch over point? is it a share price at which point that the warrant/option would yield the same return as the common? Also, why not BAC 2016 10s? isn't it better (i.e., have a better return with your velocity term)? Sorry for the newbie questions if it's been asked before (or you can point me to the right reading material). thanks. Yes, the switch-over point is the common price where the option would have the same return as the common. The switch-over point, with dividends, includes the lost dividends assuming the current dividend amount (not including possible raises in dividend, which is almost certainly the case for BAC next year, so you have to do your own guesstimate/adjustment for that). Wrt 10s vs 12s, I decided the increase in cost of leverage from ~3%->5% was worth the increase in velocity of leverage (30->43). In addition, I could buy more of the 12s than the 10s, so I also increased exposure. Moreover, if you look at the 10vs12 comparison, the common needs to reach 17.77 by Jan 2016 for the 12s to be better than the 10s (currently), which I thought was a reasonable assumption. That's most of my thought process on them. It is also similar to what I did before, buying the 10s when common was around 12, so buying 12s when the common was around 14.
wescobrk Posted October 15, 2013 Posted October 15, 2013 I wouldn't a pop up in the morning and lighten up then let Washington scare the market for 24 hours and buy on the cheap. The next 24 hours should be interesting.
racemize Posted October 15, 2013 Posted October 15, 2013 yeah, mine was just a roll, so I had the same $ exposure before and after. If it suddenly got cheap, I might buy some more I guess, though I'd have to sell AIG common in my IRA for it.
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