1. Welcome! Please take a few seconds to create your free account to post threads, make some friends, remove a few ads while surfing and much more. ClutchFans has been bringing fans together to talk Houston Sports since 1996. Join us!

STOCK MARKET: Let's talk stocks and investing

Discussion in 'BBS Hangout' started by SWTsig, Jun 2, 2008.

  1. Space Ghost

    Space Ghost Contributing Member

    Joined:
    Feb 14, 1999
    Messages:
    15,014
    Likes Received:
    6,188
  2. dmoneybangbang

    Joined:
    May 5, 2012
    Messages:
    20,992
    Likes Received:
    12,866
    Seems more like an effect of the tech crash and crypto crash.
     
  3. Invisible Fan

    Invisible Fan Contributing Member

    Joined:
    Dec 5, 2001
    Messages:
    43,259
    Likes Received:
    25,286
    Both are vulnerable to interest rate policies because of their insatiable need for revolving lines of credit.
     
  4. dmoneybangbang

    Joined:
    May 5, 2012
    Messages:
    20,992
    Likes Received:
    12,866
    Yep… risk is risky again.
     
    Sajan likes this.
  5. Major

    Major Member

    Joined:
    Jun 28, 1999
    Messages:
    41,403
    Likes Received:
    15,834
    It wasn't really either - at least not directly. It had no crypto exposure and its tech company clients were doing fine. It was a poorly written and poorly timed press release and customer call. The bank was solvent - it had $200+B in assets - sold some securities for a loss of $2B or so, and announced it was going to raise $2B in stock to strengthen its balance sheet. It was a well-capitalized bank and even with the run and shutdown, it should have more assets than liabilities to sort out money to clients (who knows how long it might take though). 2 weeks ago, the capital raise is a non-story though the stock drops some. But coming on the same day Silvergate announced its liquidation, it caused Founders Fund and others to tell their clients to take their money out and launched an old-fashioned bank run.

    If they had done it a few days earlier, waited another week, worded the press release differently, or if the CEO didn't tell his customers not to panic, the bank probably survives just fine and is a reasonably healthy bank. But no bank can survive an all-out bank run. They literally destroyed one of the largest banks in the country by accident/stupidity.
     
  6. dmoneybangbang

    Joined:
    May 5, 2012
    Messages:
    20,992
    Likes Received:
    12,866
    Fair.... but this didn't happen at some regional bank in the Midwest. Would VC clients be less prone to react in a different environment that favors risk, I think so. Seems like clients were already withdrawing their deposits before a poorly written press release.

    https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html
     
    Sajan likes this.
  7. adoo

    adoo Member

    Joined:
    Mar 1, 2003
    Messages:
    9,564
    Likes Received:
    6,099
    on the heels of the bank run on SVB, First Republic Bank Stock Drops Over 60%.
    at the beginning of 2023, the stock price for FRC was ~~ 122, it was traded as low as 17 yesterday




    think this is an over-reaction, in sympathy to the SVG bank run; reviewed the financials for FRC, unlike SVB, Calif-based regional bank has a diverse, loan portfolio, less vulnerable to high interest rate.

    willing to take a risk of FRC.

    when it was traded ~ 22,​
    • sold a naked put on FRC; the 25 strike PUT, 17 March expiration, collecting a premium of $12.4
    • buy a much longer-dated CALL; 55 strike CALL, Dec 15 eiration, paying around $12
    i need FRC to closed abve $25 on this coming Fri, in order for me to keep that premium collected ($12.4);
    then i will started selling out-of-money CALLs against the long leg
     
    #19367 adoo, Mar 14, 2023
    Last edited: Mar 14, 2023
    CCity Zero likes this.
  8. Sajan

    Sajan Member

    Joined:
    Apr 18, 2009
    Messages:
    8,275
    Likes Received:
    5,731
    it's already up 150% since the low yest. dang.
     
    CCity Zero and whag00 like this.
  9. IBTL

    IBTL Member

    Joined:
    Nov 22, 2010
    Messages:
    12,004
    Likes Received:
    12,109
    Stocks up again today. Maybe major banks need to fail more often!
     
    Invisible Fan likes this.
  10. geeimsobored

    geeimsobored Contributing Member

    Joined:
    Aug 20, 2005
    Messages:
    8,870
    Likes Received:
    3,164
    Good news! Credit Suisse is down 25% (and still falling). All the European banks are getting hammered today.
     
    Sajan and IBTL like this.
  11. IBTL

    IBTL Member

    Joined:
    Nov 22, 2010
    Messages:
    12,004
    Likes Received:
    12,109
    Great. I expect the markets to SOAR on this news. You heard it here first.
     
  12. Sajan

    Sajan Member

    Joined:
    Apr 18, 2009
    Messages:
    8,275
    Likes Received:
    5,731


    well. not so fast.
     
    CCity Zero likes this.
  13. adoo

    adoo Member

    Joined:
    Mar 1, 2003
    Messages:
    9,564
    Likes Received:
    6,099
    FRC is trading ~~ 22, i need it to close above 25, close of trading tomorrow
     
  14. CCity Zero

    CCity Zero Member

    Joined:
    Nov 28, 2014
    Messages:
    7,267
    Likes Received:
    3,500
    Did you get to place it at $12.40?
     
  15. adoo

    adoo Member

    Joined:
    Mar 1, 2003
    Messages:
    9,564
    Likes Received:
    6,099
     
    CCity Zero likes this.
  16. adoo

    adoo Member

    Joined:
    Mar 1, 2003
    Messages:
    9,564
    Likes Received:
    6,099
    with 15 min to go before closing, FRC is trading ~~$23.7. since the 25 strike PUT is in-the-money, had to pay ~ $1.8 to close that naked PUT

    • effectively, i netted $10.6, ($12.4 premium collected in advance - $1.6)


    decided to take another risk on FRC

    sold another naked PUT, FRC 04/21/2023 25.00 P, and collected $10.6 premium in advance
    i need FRC to close above 25, at expiration, in order for me to keep all the premium collected​
     
    CCity Zero likes this.
  17. tmacfor35

    tmacfor35 Contributing Member

    Joined:
    Aug 20, 2008
    Messages:
    22,968
    Likes Received:
    12,990
    I short small caps and even I'm not the biggest degenerate in here.
     
  18. Sajan

    Sajan Member

    Joined:
    Apr 18, 2009
    Messages:
    8,275
    Likes Received:
    5,731
    FRC at 12...
     
  19. adoo

    adoo Member

    Joined:
    Mar 1, 2003
    Messages:
    9,564
    Likes Received:
    6,099
    should FRC fall to zero, my max risk would be $14.4 (25 - 10.6);
    having collected $10.4 premium in advance, should the other side choose to exercise their long option to sell , I am obligated to buy FRC at $25

    some developments / catalysts in the offing that could dramtically impact FEC stock price

    • https://www.morningstar.com/news/ma...n-raising-more-support-for-first-republic-wsj,
      • the WSJ has just reported that Jamie Dimon, CEO of JP Morgan, is leading banks in a fresh campaign to shore up First Republic Bank.
        • Eleven banks last week placed $30 billion in deposits with First Republic, but the bank still reported lower deposits late Thursday.
        • Discussions are underway to find ways to convert the $30 billion in deposits into a capital raise, the report said. First Republic stock was paused for trade after losing 37% of its value after S&P downgraded the company's debt to B+ over the weekend for the second time in less than a week.

     
    #19379 adoo, Mar 20, 2023
    Last edited: Mar 20, 2023
  20. geeimsobored

    geeimsobored Contributing Member

    Joined:
    Aug 20, 2005
    Messages:
    8,870
    Likes Received:
    3,164
    Geez. Does anyone know what the actual issue with FRC is? Do they have some liquidity issue simply tied to a run on their deposits? Or is there some larger accounting issue (like SVB's issue with long dated bonds)?
     

Share This Page

  • About ClutchFans

    Since 1996, ClutchFans has been loud and proud covering the Houston Rockets, helping set an industry standard for team fan sites. The forums have been a home for Houston sports fans as well as basketball fanatics around the globe.

  • Support ClutchFans!

    If you find that ClutchFans is a valuable resource for you, please consider becoming a Supporting Member. Supporting Members can upload photos and attachments directly to their posts, customize their user title and more. Gold Supporters see zero ads!


    Upgrade Now