Options Trading Pit isn’t issuing a buy recommendation on these just yet. But if you want to buy, go for it. They should pay off well, as they could be let off the hook somewhat. And, should other banks follow in Bank of America’s lead we could see a reduction in the payouts on defaulted mortgages.
Bank of America’s “partial bailout of troubled homeowners” is helping to spike mortgage insurance stocks today. We believe the news could help double all of the companies in this arena after “Bank of America said it will reduce outstanding principal obligations for certain distressed homeowners.”
Some stocks and / or options to add to your portfolio, if you wish, include:
-
PMI Group (PMI)
-
MBIA (MBI)
-
Ambac Financial (ABK)
-
Genworth (GNW)
-
Radian Group (RDN)
-
And MGIC Investment (MTG)
These were the same companies that my longer-term options readers were able to profit from on the short side. We may now have an opportunity to profit from them again… but on the long side.
Options Trading Pit will look to issue buys shortly. We just want some of this euphoric buying to die down before we jump in.
