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Shorting capital One and selling calls on Capital one.

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firefox100
Valued Contributor

Shorting capital One and selling calls on Capital one.

 

Hi again about month ago I said that I had shorted and sold calls on another list, I posted this when Capital One COF was trading around $ 90.30 Today Capital one is trading around $ 83.45 at 4Pm. I said that Capital one was short because how thay handle ther Customers and when economy goes south ther Subprime lending for Cars and Credit cards would show losses. Thay are down for other reasons the whole market is down, but Capital one is down more then some other banks. Thay are going to have big losses in lending operation, stock has more to go down. I made money iI put my money wher my mouth was.

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Shorting capital One and selling calls on Capital one.

The luv button gonna go bye bye...😂
Message 2 of 6
Anonymous
Not applicable

Re: Shorting capital One and selling calls on Capital one.

Lol if the luv button goes away, that’ll only save them about $2000 per year in eliminated CLIs across their entire customer base.

Maybe they could make up some more revenue by only paying to pull one bureau for lending decisions instead of all three...?
Message 3 of 6
Anonymous
Not applicable

Re: Shorting capital One and selling calls on Capital one.


@Anonymous wrote:
Lol if the luv button goes away, that’ll only save them about $2000 per year in eliminated CLIs across their entire customer base.

Maybe they could make up some more revenue by only paying to pull one bureau for lending decisions instead of all three...?

Amen!!! The triple whammy is a bit much.

Message 4 of 6
Anonymous
Not applicable

Re: Shorting capital One and selling calls on Capital one.

Especially for less-than-exciting card offerings that pale or (at best) maybe equal what’s available elsewhere for one pull...
Message 5 of 6
wasCB14
Super Contributor

Re: Shorting capital One and selling calls on Capital one.

Definitely a higher-risk portfolio. On page 20 of their 10-K they call the subprime segment a "strategic choice".

 

They do also have a lot of prime customers who just like having a basic card and PIF. The low-risk $5k/month spend PIF customers can reduce the risk somewhat from the $300 accounts.

 

I only got a double pull for Savor (and no, I'm not mistaken, nor am I alone in this). I can live with $500 for one new account and two inquiries. It seems like new accounts have been the bigger obstacle than inquiries for a few years, though.

 

Glad to hear OP made money. I don't short stocks but I do very rarely buy puts. Good percentage returns but small bets as the stocks thus far have had illiquid options markets. It takes a lot of confidence to actively bet against a company when shorting means paying interest and dividends and puts mean a major or total loss if the stock price doesn't fall enough before expiration.

 

One tricky thing is that Capital One has gotten a lot of customer service complaints for many years...it's hard to time if or when it would actually hurt the stock price.

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