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Posted On: 05/10/2017 3:13:45 PM
Post# of 2218
$Ally Financial (ALLY)
Auto sales tanked again today, which looks largely priced-in with the big automakers and sellers. However, Ally Financial (ALLY) has lagged the bearish breakout, which John and Wade think presents a very attractive opportunity. The company is incurring rising hedging costs and defaults are becoming a bigger issue. The ongoing decline in sales and car prices is another factor that investors don’t seem to be pricing in yet. John and Wade feel that this has created a dramatic mispricing opportunity that should play out in their favor with a short-term drop to the downside.
‘Buy to open’ the ALLY June 20 Puts (ALLY170616P00020000) for a maximum price of $0.85.
Auto sales tanked again today, which looks largely priced-in with the big automakers and sellers. However, Ally Financial (ALLY) has lagged the bearish breakout, which John and Wade think presents a very attractive opportunity. The company is incurring rising hedging costs and defaults are becoming a bigger issue. The ongoing decline in sales and car prices is another factor that investors don’t seem to be pricing in yet. John and Wade feel that this has created a dramatic mispricing opportunity that should play out in their favor with a short-term drop to the downside.
‘Buy to open’ the ALLY June 20 Puts (ALLY170616P00020000) for a maximum price of $0.85.
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