WM - bought some 12.50 feb puts @ 1.80

[MrSer]

Missed earnings by -62%. Brought some 12.50 feb puts @ 1.80. Lets see where it goes tomorrow.

[primer]

It's rallying pretty strong today.

[MrSer]

Originally Posted by primer

It's rallying pretty strong today.

its at 1.60 atm and don't know why..

[BetonBeer]

I don't like WM and don't think its rally will last. Maybe with this jump it is time to get in on those 12.50 puts a little cheaper. What do you think?? Might be joining ya!

[wallstreetsedge]

honestly i wouldnt have done so... theres a lot of consolidation in the financials. even net bank was bought out when things were good. the only way these companies are going to survive now are through consolidation.

wm is in a bad situation but look - even cfc was bought out by bac. in my opinion, its playing with fire, the company wasnt burned enough to the point where it wont recover. wm also has enough $ to keep it afloat.

right now heres what i think will happen.. wm is going to end up getting bought out jpm or a merger is going to take place between wm and either wb or wfc.

chartwise, its not too bad for the short term, theres some good support at this level. looks like it could go to 15-16 before seeing a pull back.

i think if you wanna make money on the downside.. the best place to go short is on mortgage and bond insurers and the home builders. theres still plenty of downside.

if we could see a couple of short coverings on bzh, phm, or kbh.. i would definitely go short on those builders again

[netwrangler]

Originally Posted by kthomllc

honestly i wouldnt have done so...

Have to say that wudda, cudda, shudda analysis is a day late and and dollar short.

Ya know, I'm really brilliant if I can pick stocks the day after they trade.

[wallstreetsedge]

haha i didnt look at the dates. i always just go to posts near the top of each section. oh well

[pedrom727]

I shorted Wamu above $14 so I just covered as soon as we opened and made some decent profits. I'm still very skeptical of any acquisition in WaMu, I'm probably going to give it a week before I start building up another short position as I believe speculation and the oversold market condition will cause a bounce even with some moderately bad news. Now if more bond insurers tank or get downgraded, the financials will likely get punished a little more, but that scenario has already been somewhat priced in on Thursday in Friday. You still have a while before next expiration so I'd still recommend holding the put.

[pedrom727]

Also be aware WaMu still has a pretty hefty market cap of 11.8 Billion, I highly doubt JP Morgan would follow up on their preliminary talks, especially within the next month. They are looking to acquire a significant market share in the mortgage area, primarily on the West coast and down south.

Currently WaMu is holding about a 5.5% market share nationwide in mortgage originations, with banks such as Indymac coming in around 2.5%. However, Indymac's market cap is only 355 Million, making it a much better value. In addition you have possible antitrust regulations which would prevent a merger like this in addition to pending SEC investigations and lawsuits against WaMu's loan practices. In my opinion this makes the regional banks a much better acquisition target for cash hefty companies like JP Morgan.