There's a bit of a disconnect today between the trading of AIG's common shares and it's subordinated debt. The debt is doing nothing, yet the common shares are soaring. This could be due to simple short covering on the common shares. However, rather than messing around with the common, I'm going to roll over my profits from writing the September $2.50 Puts, and buy some of the subordinated debt. The 7.7% coupon is still trading at around 30 cents on the dollar, implying there is still a very good chance that AIG will eventually have to declare bankrutcy. This is another gamble trade, but it at least gives me an interest in the fortunes of AIG.
Gazza > Trade Notes
Member since: Aug 08 
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Gazza: Trade Notes
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