Risk/Reward Ratios

CIT :   LONG      DEATH (-∞%) - (+220%) $600

C:       SHORT    25.00(50) - (50) 23.00 - then long - (3-5%) - 100%

Thoughts:

Citigroup: 

The Good

1)I have a good feeling about this one. SImilar to the way i felt about NFLX, FSLR, IBM, BAIDU, and WFC (the stocks that helped me realize a 100% annual return last year)

2)a leader in innovation. popularized the atm. hired the former CEO of travelocity, which is credited with revolutionizing the consumer flight booking process. They are downsizing their middle class consumer-oriented operations and focusing on innovation and international cities. There are things on the horizon. They can't compete in the retail-banking sector (deposits in a string of local branches), so they will have to innovate in order to stay competitive. 

3)recognizable name. named best of the bad banks ("the cleanest piece of shit in the toilet")

4)technicals look good. I understand the chart. short on the way down to resistance, go long into earnings (maybe after, depends on research).

Bad

1)they have exorbitant fees for a checking account. 

2)balance sheet is a wreck still. lots of landmines

CIT

The Bad

1)Initial Reason for buying is gone.

2)even if they don't declare bankruptcy, my shares will be significantly diluted by the share offer to the bondholders.

3)bankruptcy will cancel the value of my shares. since i have all but five dollars of my portfolio invested, the amount of loss (100%) will be so great that I will be unable to continue trading.

The good

1)from my (very humble, one time) experience with a less drastic (15%) case of stock sale, the numbers on dilutions don't always add up between the balance sheet and the stock price. This means that if bankruptcy is not filed then i could see over a 200% return on my portfolio in a matter of hours. This would get me closer to my mid-term goal of once again having sufficient capital to leverage.

2) I don't want to realize a loss on my IRS record (effectively my professional scorecard)

Considered shorting C today on the way down and covering at lower resistance. Decided not to realize a loss early in CIT to free up money to short it. i'll see if the volatility will give me an opportunity to sell CIT at a higher price.  By the time the price is up a little more the price of C should be at a good place to go long.

Things I told myself today

start trading fucking options you douche! risk/reward is better on risky plays like cit: risk $100 for the possibility of obtaining 13,000 worth of stock or risk 50-400 dollars to gain 300%?

stop being mentally lazy! or you're no better than those idiots on yahoo board

usually we open our mouths as a way to escape from the task at hand

if you are afraid to admit your loss to the whole world, then you shouldn't even let it become a possibility.