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National Bank of Greece SA Message Board

  • bankslloyd395 bankslloyd395 Oct 19, 2013 4:55 PM Flag

    Last time I recall record call options buying, the stock jumped

    Does anyone remember when investors bought lots of call options when there was no real news that would suggest a recovery, and then the stock jumped? I think this was right after the first reverse split, although the stock also jumped right before the last reverse split. With all of these call options being purchased, and what seems like a relatively small amount of put options, there appears to be a lot of new interest here. The fundamentals don't seem great, so can anyone shine some light on why this may be? Thanks and GL!

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    • To add: Perhaps the issue of warrants being triggered is leading to lots of short interest and the shorts are hedging with calls. Otherwise, I can't figure out why there's so much interest...

      • 3 Replies to bankslloyd395
      • I think the reason for the interest in the options is obvious, people see NBG surviving and moving forward. My question is, who is SELLING the options, because there are a TON of $7 call options out there. I think these are QUITE POSSIBLY nekkid calls sold to the market by warrant "owners." They've sold the calls, effectively hedging their risk of the warrant strike price not hitting. They hold the warrants and got a "discount" by selling the calls.

        There are many reasons to buy the options. They're relatively cheap, or were, especially considering the recent volatility. Also, keep in mind, NBG, though a bit of a mess, is included in many ETFs. Most US money probably won't flow into Greece with individual stocks, it'll flow through ETFs. NBG will have to be included in many Greek ETFs. So, as Greece's outlook improves, NBG will get a bit of a "boost." NBG starts cranking profits, even better.

        Essentially, the call options are a way of getting into the warrant offering, just through a different door, and perhaps at an even bigger discount. If the calls hit their strike price it will be a win win for both the call option buyer and any warrant owners who sold options in the sense that there will be profit for both. Arguably, the option purchaser has more potential upside since the upside for the call buyer is uncapped. The majority of call sellers MAY be smart\conservative money that bought warrants and were willing to cap their earnings\hedge by selling the options nekkid, knowing that if they were called, the warrants would cover the options.

        That is my simple observation\theory of the call activity...? Means nothing :)

      • But exercising the warrants to get shares already in existence within the HFSF increases the float but not the number of outstanding shares so no dilution, correct?

        Sentiment: Strong Buy

      • you nail it, but the answer is when those warrants are due to open for public offering is in november and so is the price triger of 4.29 euros to the equivalent of $5.85 dollars. the unknown is at what price the hedies will drive the pps up and at what price are they willing to pay. shorting the pps and selling those shares will cause the price to plumet lower than $2 dollars the actual bank valuation of book value is around $1.80 give or take. HFSF IS HOLDING 90% OF SHARES that is over 2 BILLION shares that is with a B. good luck for the ones who can stomach the wins and losses.

 
NBG
3.13-0.01(-0.32%)Sep 19 4:12 PMEDT

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