One of the few positive reports I've seen commenting on the extremely active put volume today:
AIG - interesting speculation at these levels?
Recs 1 Follow Share Report
July 09, 2009 – Comments (0) | RELATED TICKERS: AIG
AIG's chart looks terrible. However, I haven't seen much fundamental news throughout this freefall. I think the drop is caused by (1) the reverse split causing sellers and shorters to appear and (2) an analyst report. Neither of these are fundamental news. Rather, it is short-term market shifting. Thus, I think AIG should recover in the short term, even if it is destined to be nationalized and/or bankrupt someday.
The level of fear in AIG right now is extreme, as you would expect looking at the chart. Option premiums are sky high, and put premiums are significantly higher than call premiums. This is a great thing to see if you are trying to pick a panic bottom.