The Dean’s Trades: SKF calls & LEH puts
September 9th, 2008 at 6:56 pm Posted by The Dean
I bought some April 09 SKF calls earlier today around $20 per contract. SKF is the symbol for UltraShort Financials Proshares, which moves inversely with financial stocks. I bought the Apr 09 +130/-180 calls because they were pricing in an 85% chance that the bear market in financial names was over. Absurd, in my opinion.
Also I have a limit order to sell my LEH puts if it drops again tomorrow AM. That’s great because I think all stocks but especially financials are going to fall much further. The so-called July 15 “bottom” was caused by aggressive government invervention. A sustained bottom to a real estate crash – which is what we are experiencing – will never be produced by government intervention. It will happen naturally but not for a long time.
