Tom Armistead's  Instablog

Tom Armistead
Send Message
I am a retired accountant, having spent the early years of my career in the insurance industry and the later part in the field of accounting. My insurance experience has given me the willingness to accept investment risk if I feel the return justifies it; also, an interest in applying risk... More
My blog:
Tom Armistead's Instablog
  • MBIA: Inexhaustible Supply of Shares 1 comment
    Sep 22, 2009 5:13 PM | about stocks: MBI, AMBC

    Today MBIA (NYSE:MBI) was up as much at 25% on no news, options action was very heavy, volume greatly in excess of open interest on the Oct 8, 9, 10 and 11 strikes.

    The amazing part was that 40 million shares changed hands.  Ownership has become progressively more concentrated between Warburg Pincus owning as much as they do and many value type mutual funds are holding large positions.  Even some hedge funds have been taking concentrated positions. 

    At one time I used to think that with short interest at 29 million that a squeeze would result if and when the shares ever rallied.  But, clearly from today's action there is an inexhaustible supply here, anyone and everyone who is short can cover all at once any time they want to.

    Maybe it's like a roller coaster and it has to be dragged up to the top of the ramp before it can make another run downhill.  

    I have quite a few Oct 7 calls, part of my ongoing bullish reversal strategy.  I took some profits because they were there, but held on to most of it. That's the point, if this makes a really big move I am going to control enough shares to make a difference. 

    Credit spreads on CMBS and RMBS have been falling lately, a sign that the market is beginning to think those situations may not be total losses.  Aaaaadjusted Book Value remains at 40.01 until we hear otherwise, and even shares of the literally worthless Ambac are rallying.     

    Stocks: MBI, AMBC
Back To Tom Armistead's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Ricard
    , contributor
    Comments (3814) | Send Message
     
    Well, if you looked at the action around Perot Systems, this may be a screaming buy signal for any and all near-the-money Oct calls.

     

    online.wsj.com/article...

     

    (at a public computer, don't have my subscription on)
    22 Sep 2009, 07:51 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

  • $CRC filed 8-K, they amended their covenants. Being thrown out of S&P 400 mid-cap index, OXY unloading its remaining shares, I added today
    Feb 24, 2016
  • $CRR just noticed a form SC 13G, Wilks Bros, Dan and Staci Wilks own about 10%. Texas billionaires. Compare that to the huge short interest.
    Jan 16, 2016
  • $CRC reveals they have received a 24 month modification of their term loan and revolver. This reduces potential financial stress.
    Mar 24, 2015
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.