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IBDvalueinvestin (98.50)

Bank stocks Crashing, but now we are gonna have to pay a bigger



April 20, 2009 – Comments (1)

premium on PUTS for banks, as thats what happened before when the banks started crashing. The premiums on PUTS went so high it was not worth buying any PUTS.

1 Comments – Post Your Own

#1) On April 20, 2009 at 2:55 PM, checklist34 (98.59) wrote:

but calls should get cheap...  and if you think that by jan 2011 banks will be significantly higher than they are today, you can take advantage of the high prices on puts.

buy calls on whatever bank stocks you like, and then sell enough puts to wipe out the cost of the calls entirely OR to wipe out the time cost of the calls.  i.e., buy in the money calls and sell enough puts to wipe out any premium you paid on the calls tahts greater than >current price - strike price<</p>

I am almost free of bank stocks after friday (options day, they all got called out or sold), but I'm still suffering huge today as I have alot of BDC shares, insurance shares, and basically everything that I own is getting killed.

But...  if bank shares get anywhere near as low as they were in early march, I'll be back in banks again in a big way

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