UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: altstrat91 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35272  
Subject: interesting arb on DELL bonds / equity Date: 1/19/2013 12:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
so last night i spoke with a trader that i highly regard. he has a pretty heavy long equity position in DELL (>6 figures) and believes the private buyback/merger is going to happen.

but i almost fell out of my chair when he responded to my question as to if he bought puts or how he had hedged himself? incredibly, he hedged the trade by shorting some DELL bonds.

sure enough i brought up a bunch of DELL corps [[ in particular, the 2012s, 2028s, 2038s, 2040s and low and behold to my astonishment, they are all trading way under par. its been a little bit since i have looked at these DELL corps, but in the past they were trading at huge premiums to par being A rated.

so the bonds have been very recently tanking and as you know i always say, follow the lead of the whale size debt traders as they usually can be pretty insightful on a move like this.

there still might be room here on the equity side to put a trade on with DELL stock still in the $12's. i have further DD to do..........
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement