AIG, our favorite momentum stock got back in play yesterday off the breakout at $14. I traded it okay yesterday though I didn’t make that much money off the initial point and change move after being long from 13.8. I actually made most of my money off the two consolidations at 16.4 and 18.65. I am still puzzled by the incredible run up to 29.39 today.This kind of volatility reminds me of what trading was like last September/October in all the other financials. Seriously, what great trading opportunities for short term traders.
Jtoma said it best in CNBC’s half time report today: “Strap your seat belts on when you trade this. I am trading momentum, when it is going up I am long, when it is going down I am short. And most importantly, I am praying to the market gods that I don’t get caught on the wrong side”.
It is true. When stocks get this wild it is not your job as a small player in the market to decide what is the right price of the stock. Seriously, unless you are Steve Cohen or someone with deep pockets and ability to decide where stocks ought to trade you do not fade these moves.
As momentum traders this is the most fun time to trade. There are so many opportunities throughout the day that losing $200-300 should not upset you. Yes it sucks but if you are making high probability plays, then risking that much to make $1k in one trade is not a bad trade off. And when you find yourself making 10-15 of these trades a day, trust me you can have a ridiculous day. I was planning on taking tomorrow off to enjoy myself but can’t walk away on a market this good. In fact, if the market continues like this I may even consider postponing my trip to South America later this month.
AIG will most certainly be in play for the next couple of days. Before 2pm today I thought the stock could really tighten up tomorrow because of the huge volatility it has had in the last two days – similar to GS when they reported. However, judging by the price action in the close I actually think it could have very dramatic moves off the report. I think I am still shocked at what I witnessed in that stock in the close. I have never seen anyone dump about 20 million shares showing 500k on the offer without moving this stock more than 2 bucks. Most importantly, whoever soaked the stock on the long side is making a humongous bet that the stock is going much much higher.
So here is my trading plan for tomorrow. Expecting to be in my desk by 7am waiting for the numbers to come out. Should they be horrible it could get very ugly. Whoever took in that much size in the close could be in serious trouble. I wouldn’t be shocked if we see this stock trade down to $16 if this is the case. However, if they crush their numbers it will be interesting to see what the reaction is. Certainly not going to be over aggressive on the long side until the stock holds above $24. Holds above $25 would be go time for a run up to $30.
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13 Comments on “AIG Shenanigans”
That last hour was seriously entertaining. It was tough to trade though unless you could get it short. Even for those that could get it short, I would think it would be a tough hold because there was serious buying as well and he didn’t drop the bid for very often in the face of that size.
Damn was that fun to watch.
Yah JTOMA was right on the money about the seatbelt thing. But made for some good trading.
Yah JTOMA was right on the money about the seatbelt thing. But made for some good trading.
Yah JTOMA was right on the money about the seatbelt thing. But made for some good trading.
Ando – yes it was certainly hard to hold a large core short as the buying on the bid in front of the huge orders was too intense. I just watched my tape all over again. I still can’t believe what just happened. 🙂
Dominic – Get ready for another fun day tomorrow. It is going to be awesome.
Ando – yes it was certainly hard to hold a large core short as the buying on the bid in front of the huge orders was too intense. I just watched my tape all over again. I still can’t believe what just happened. 🙂
Dominic – Get ready for another fun day tomorrow. It is going to be awesome.
Ando – yes it was certainly hard to hold a large core short as the buying on the bid in front of the huge orders was too intense. I just watched my tape all over again. I still can’t believe what just happened. 🙂
Dominic – Get ready for another fun day tomorrow. It is going to be awesome.
Any possibility that it was one person who was selling and bidding the stock just trying to make money on the spread?
Any possibility that it was one person who was selling and bidding the stock just trying to make money on the spread?
Gman… i witnessed the huge offer it was flipping back and forth on same exchange. iv really never seen anything like that. it was flashing on the offer and the bid at some points… I stayed away from it, as i trade the options… Did you by chance see what MASSIVE offer on FAZ today right as GS was breaking down… finally the wall came down @24.50 instantly AIG dropped 3$ in 20 seconds… crazy trading..
Gman… i witnessed the huge offer it was flipping back and forth on same exchange. iv really never seen anything like that. it was flashing on the offer and the bid at some points… I stayed away from it, as i trade the options… Did you by chance see what MASSIVE offer on FAZ today right as GS was breaking down… finally the wall came down @24.50 instantly AIG dropped 3$ in 20 seconds… crazy trading..
Gman… i witnessed the huge offer it was flipping back and forth on same exchange. iv really never seen anything like that. it was flashing on the offer and the bid at some points… I stayed away from it, as i trade the options… Did you by chance see what MASSIVE offer on FAZ today right as GS was breaking down… finally the wall came down @24.50 instantly AIG dropped 3$ in 20 seconds… crazy trading..
Matt – I am not sure this could be just one guy trying to make the spread…but then again I wouldn’t be completely shocked. It was silly all in all.
Sellputs – I did see the huge FAZ offer yesterday. A few of our guys crushed that breakout with huge size. That has to be one of the cleanest moves we have seen in those dopey ETFs. I was too busy getting schooled in AIG in that 3 point drop. 🙂