Thursday, August 20, 2009

A little Arb love

I had a position on in JCI - I was long a convertible and short common - its kinda complicated but on a bunch of different metrics it looked like a cheap piece of paper (just take my word for it). So I bought the convertible a few months ago, shorted the stock and let it bake. Well this cake got cooked faster than I had planned, the company today announced there intention to redeem this convertible but they are kicking in a sweetener..So I pick up a few dollars, moral of the story is when you do your homework and put things on for a good reason sometimes you get rewarded.
The market dip was reversed almost instantly as players fell over themselves to buy that .05% weakness this morning. Im shorting AXL and buying upside calls - theme there is its time to short some junk.

JB

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