Market Traders Out There

[jonniebkk]

Any of you market traders (primarily USA markets) thinking it's time to start to think about upside potential in specialty mortgage finance companies? The values are starting to look really compelling if you have an appetite for risk (and outsized gains). Specifically I'm thinking about the private mortgage insurers and some land title companies. Many like MBIA, PMI, TMA, LFG are trading way below book. Sure, there is a reason for this but I think many are way oversold and RE markets will not be dead forever. Markets are already starting to stabilize somewhat (Countrywide expects to be profitable next quarter). One could play these with either call or put options but maybe a good play is in the money puts for first and second quarter of next year. When exercised, pick-up some stocks cheap or earn 15-20% on the premium and div. income till expiration?

[sonicdragon]

Personally I would wait until the credit markets stabilise before buying the mortgage lenders and insurers. Credit default swaps continued to sell off last week, which just doesn't tally with a turnaround in the market. Also, history shows that when credit crunches happen, then don't get resolved in a matter of 2-3 months. No one knows that book value is for these companies at the moment, not even they know, hence the big discounts. But as a trader if you think that it's overdone, then shorting puts is not a bad way to go. Would you care to share some market pricing on those .

[YoungFarangNa]

I think its way to early to think about these stocks recovering, even with the looming rate cuts.

[PCA]

Any of you market traders (primarily USA markets) thinking it's time to start to think about upside potential in specialty mortgage finance companies? The values are starting to look really compelling if you have an appetite for risk (and outsized gains). Specifically I'm thinking about the private mortgage insurers and some land title companies. Many like MBIA, PMI, TMA, LFG are trading way below book. Sure, there is a reason for this but I think many are way oversold and RE markets will not be dead forever. Markets are already starting to stabilize somewhat (Countrywide expects to be profitable next quarter). One could play these with either call or put options but maybe a good play is in the money puts for first and second quarter of next year. When exercised, pick-up some stocks cheap or earn 15-20% on the premium and div. income till expiration?

PMI and LFG look hot. Will post you when there is a good trade. From MBI and TMA I would keep my fingers away.