Last week on Tuesday morning, the C March $4 calls were bid at $.00. (I own a bunch of them.) On Thursday afternoon, the same calls were bid at $.21. (I sold part of my position at $.20 and $.21 and added to my position of June $4 calls with half the money.) On Friday afteroon the same calls were bid at $.10 (I bought some more at $.11 with half the money I made the day before.) I could have cashed out everything on Thursday. I did not. I believe Friday was profit taking and possibly a little manipulation. I will find out on Monday if I did the right thing. C will definitely have to close above $4 on Monday for me to feel comfortable with my decision. I realize that the time value of the options is mostly gone and I realize that the "smart/safe" thing to have done was to have sold last week. I also realize the potential for market manipulation going into options expiration. I believe I am taking a calculated and reasonable "risk/gamble" and I will find out the results soon enough..............
The government said (when Citigroup did their secondary offering in December) that they would not sell any shares for at least 90 days. The 90 days expires on March 16th. In theory, this means that the government could start selling their shares next Wednesday. The good news is that the government would no longer have a stake in Citigroup. The bad news in painfully obvious. You can't sell 7+ billion shares of C and the stock not go way down. Therefore the government is not going to just sell their shares.
Look at what has been happening. EVERYONE, and I mean EVERYONE, knows that the government could start selling their shares next week. Yet, in spite of that, the stock price has gone way up in the last week. Why wouldn't everyone wait until after next week?The reasons, in my opinion, are twofold. First, Citigroup has had plenty of good news in recent weeks. (I have posted about some of it.) Secondly, the government is NOT going to do something that will ruin shareholder value. (They are the largest shareholder afterall!) That would not benefit anyone! There MUST be something going on behind the scenes. Maybe it will be announced next week, maybe it won't.
I believe C goes higher next week. (I have plenty of money where my mouth is!)
C IS THE LEAST EXPENSIVE BIG BANK STOCK, BY FAR.
Good luck to us all!!
(& thank you for reading my very long post.........)
Well, at best it is a convoluted addition to my strategy. Look, I like C and I like that it went up last week prior to the government lockout. Tuesday and Wednesday are key days for my March $4 calls. If C is not trading above about $4.10 or so by Wednesday, I am in deep trouble.
Not long to wait...............
With the options so close to the strike price maybe you should have bought both calls and puts. Then as the stock moves up and down you could make money in either direction. I think we will see some swings before options expiration .
There is a time value to the options. (even in the last week) My March $4 calls closed at $.05 bid. Since I own 700 calls, they are worth $3500 minus commissions. (commissions at Ameritrade are $75 per 100 contracts + $9.95)
In regard to March $4 calls:
It appears I have made a mistake. (I would be better off if I had sold last Thursday and not bought some more back on Friday. Also, I bought more today, which could end up working out well.) Tomorrow and Wednesday will tell the tale..................
A week ago, I didn't have any hope for my $4 March calls. Now, there is hope. As far as your $5 April calls go, you never know. Let's see what happens in regard to the government shares (maybe an announcement of some kind this week) and earnings in April. All I know (and you should know) is that your options are extremely risky/speculative. With that comes a much larger return or a real chance of losing everything............ (I will get to experience that, this week.)