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March 28th, 2019 at 5:18 pm
Phil – CMG short – sure you can pick it, but I will consider it as a 'bonus' play – doesn't count towards the 3 sensible ideas that I am looking for :).
Of course, at some point CMG will go down – so shorting it every month will work eventually!
But price / value / fundamentals are so disconnected on the CMG beast that I am not sure one can construct a rational play that has a chance of working. Take for example those Jan 20 $600 short covers that were selling at around $80 (when that was a potential adjustment, and the concern was (perhaps understandably) that we would never see that price again – well, those same $600 short calls are selling now for $150. Perhaps not the end of the world, but there's a lot of time to give the caller between now and January next year, and the adjustments are a big ask.
Of course it only needs a poorly received earnings report for that imbalance to correct itself.
Just a few reflections.