I Would Never Say I Told You So, But…
In a post a few months ago we took a look at the BAC class B warrants (BACWSB). I believe I said at the time, “don’t be a greedy bastard, sell Mortimer, sell”. Well…
A few days ago the B warrants touched $1.01, down 70% from the close on 1/23/18.
Let’s reverse the old buy low sell high adage. Since we sold high, now let’s buy low.
The common stock of BAC is just above $29. The last time the stock was at $30 the warrants traded at $1.50. The warrants are just above $1 now.
I see two trades available right now.
- Buy the warrants and sell them as the stock rises off of support at $29.
- Buy the warrants and short weekly call options against a portion of your long position.
One of the best ways to make money in a stock is to trade around support and resistance areas. The $29 level is support for BAC.
I think the warrants could see a 10-20% bounce with the stock from here.
Disclaimer: I’m long the B warrants and short weekly calls against 20% of my warrant position.