--- the subscriber area has no ads and those above are not selected or endorsed by this site ---


BGCP trading question

06:31 02-Oct-20


Well, serves me right for being the umpteenth to bug you about BGCP; now you've commented on it and the extra-great value is gone!  Just kidding (sort of).  I guess you really do have an effect on the market!

Seriously, thanks again for highlighting BGCP because without your attention over the last year or two, it wouldn't be something I'd be confident enough to invest in significantly.  Probably many feel the same, hence the relatively undervaluation.

On Tue, Sep 15, 2020, at 4:22 PM, Esekla wrote:
Hi Edward,

I wouldn't necessarily call this fundamental, but I think options are influencing the current price of BGCP more than usual.  There has been evidence that a fair amount of money follows my writing, and I've been saying since the dividend was cut that nothing happens with the company until at least the election.  Now that we can trade November options, we can open put and call positions on 7M shares at the $2 and 3 strikes, respectively.  They are cheap enough and the stock is undervalued enough that people see little reason to hold the stock instead of the options at a fraction of the capital.  For the long run health of the business, there's nothing to see here, but that's the closest I can come to explanation on the day to day pricing.  I still like having a stake in BGCP at these prices, no matter how one goes about it, and there's a decent chance that I will include a note to this effect tomorrow if I write about the FOMC meeting, since you are not the first to ask.

Esekla


On 9/15/20 3:36 PM, a reader wrote:
Dear Esekla,

Thanks for all your continuous updates and analysis.  (I actually only read your emails, even knowing there is more content on your website, simply because I'm almost always short on time.)

Anyway, I'm curious whether you think there's any rhyme or reason (beyond usual market gyrations and players shorting / liquidating for idiosyncratic reasons) behind the decline in BGCP price.  In other words, do you know of, or can you surmise, any fundamentals-based explanation for recent price decline?

I've been adding below 2.40, just FYI.

Thanks in advance!