Originally posted by walesa:
By the sounds of it, you invested in an American call. On the back of the vols witnessed lately, I'm not sure if there's much of an opportunity for you to make significant profits from it (if at all).
Yes u're right. I got American call options.
Weren't trading volumes highest in Oct 2007 .. ?? when everyone was trying to jump onto the bandwagon?
look what has happened ...
Topic title should be " Citibank closes at $1 !!!!!! "
US bank Citigroup may need to raise up to 10 billion dollars in new capital as President Barack Obama's administration continues talks with banks over the results of its "stress tests," the Wall Street Journal reported.
The money would be in addition to the 45 billion dollars Citigroup has already received from the government since late 2008.
"The bank, like many others, is negotiating with the Federal Reserve and may need less if regulators accept the bank's arguments about its financial health," the Journal reported on its online edition, citing unnamed people familiar with the matter.
"In a best-case scenario, Citigroup could wind up having a roughly 500 million cushion above what the government is requiring," the Journal reported.
US officials will reveal on May 7 results on "stress tests" conducted on the 19 biggest US banks that have received public aid to weather the global financial crisis, a government source told AFP on Friday on condition of anonymity.
The results of the tests of the banks' capacity to withstand a worse-case scenario of the current recession will be published after the stock market closes Thursday, the source said.
According to the government source, the tests should reveal information about the banks as a group, as well as details on each individual bank.
http://sg.news.yahoo.com/afp/20090502/tts-us-company-banking-citigroup-972e412.html
There are lots of "financial experts" who comment about this or that investment without really knowing the real details. So let's set the record straight. If you cannot understand what is written, then I'm afraid I can't explain it any simpler.
When GIC invested in Citi, it was to buy preferred stock yielding 7% a year. It is more akin to a bond investment than a stock investment, as people invest in preferred stock more for yield than capital gains, unlike common stock investments. To repeat, preferred stock is NOT the same as common stock.
In late February 09, GIC converted the preferred stock holdings in Citi into common stock at an exchange price of US$3.25 a share. This deal was cut when the US government injected capital into Citi. The Citi stock price that GIC invested in is US$3.25.
As of last night closing, Citi common stock was trading at US$3.81. Hence, there has been a PROFIT of 17% in the Citi investment.