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.
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