×

End of Dash For Trash?

A cruel December for AIG? That appears to be the bet from both equity and options traders.

The stock is down 12 percent today on concerns about loan reserves. But that decline is not enough for options players.

In some massive trades hitting the tape today, options traders furiously bought the December 20-, 25-, and 30-strike puts in a bet that AIG stock is fast heading south.

Could the dash for trash trade be over?

"My sense is that once we get through 2009, bank investors will look much closer at some of these measures and be a bit more selective about owning some of the weaker names," said Phoenix Partners Dan Nathan.

"The trade off: going forward there will likely be underperformance by some of the weaker capitalized names that have lead the way," Nathan added.

Questions, comments send them to us at: optionsaction@cnbc.com

Latest Video

Tutorials

Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Options Action Traders

From Our Sponsor

Options Action Newsletter:

Sign up to receive exclusive Options Action content. Each month you'll receive an exclusive message from host Melissa Lee and insight directly from one of the members of our Options Action panel. Keep your pulse on the market with the Options Action newsletter.

Please enter a valid email address
To learn more about how we use your information, please read our Privacy Policy.