View Full Version : Call option on Fannie mae Jan 2007

08-27-2005, 04:54 PM
Thoughts? Strike price 50$ selling at 7.30 per option. Current stock is at just under 50 so asset is ITM. Im thinking this may be my first purchuse. Can only see FNM going up from here. What do you think?
Thanks in Advance.

08-28-2005, 07:17 AM
In my opinion, that would not be wise decision. They are hiding massive losses right now with lots more to come and have a completely unsustainable business model. You should listen to the latest Saxon Capital conference call where the management admits they pass off all their crappiest subprime loans that they wouldn't touch with a ten foot pole to Fannie Mae.

Furthermore they are criminals whose top people should probably be sharing a cell with Bernie Ebbers. I read that they have literlly thousands of people working on their earnings restatement and they still aren't going to be done cooking the books until the end of next year!

In short, possibly one of the worst investments available right now. It would be an easy short if they didn't have the unspoken protection of the powers that be.

08-28-2005, 09:43 AM
280 people working on their engagement and are doing a massive restatement. It is because of the backing of the Federal Gov't that i see this as a good investment. I cant imagine it dropping much lower than it has. And yes they are crooks.

08-28-2005, 02:55 PM
you need a better reason than 'i can only see it going up from here.'