Friday, May 9, 2008

Seriously. Plan for next week.

There's a ton of assumptions in this cookie and make sure you know how much radioactive materials you can take before ever contemplating this kind of move. Plan subject to change or cancellation without prompt notice. Remember always that this strategy assumes you are comfortable soaking your nuts with kerosene while you sit next to an arc welder. Sanity first, fear second, greed third.

Monday: Find as good timing as I can while MBI blew up -> FRE call option, 30 piece front end. Dont add FED or DSL.

Tuesday: Long FRE 2,000 shares. Dont add FED or DSL.

Wednesday: Add whatever DSL and FED short available. Unload AH 2,000 FRE shares.

Thursday: Add whatever DSL and FED short available. Sell 30 options FRE. Short 2,000 WB.

Friday: Short 3,000 WB. Add whatever DSL and FED short available, pray to the Opex Gods for as big a short squeeze as possible.

3 comments:

Prospector said...

Friday: Pray for a short squeeze?????? After getting heavily short the previous few days, why do you want a short squeeze????

Penn said...

MBI blew up, but reaction on FRE looks muted. The plan still on?

MTGSPY said...

MBI didn't blew up, maybe Conf call will do something, maybe not.

I am looking at FRE-FNM spread of 25.60 - 27.81 = $2.20

which is quite a drop from near $4 high.

What are people thinking about earnings heare?

Is there a U-turn pattern? V-turn? L-turn?

Even an L-turn can get you $5 jump in a hurry. A U-turn -> Death of short seller.

But back to the question, price level suggests nothing. Watch carefully FRE-FNM spread as this is the only way to tell what's the action of institutional buyers 24-48 hours before earnings.