Hedge fund manager Bill Ackman said Wednesday he has bought 150 million shares of Citigroup Inc. (C 3.10, +0.14, +3.61%) , one of the bigger bets touted at a widely followed industry conference in New York on Wednesday.
Ackman disclosed the Citi stake at the end of his presentation at the annual Ira Sohn Investment Research Conference, saying he had no time to discuss it. He spent most of his time explaining why he thinks credit ratings agencies can be saved, and touting General Growth Properties Inc. (GGP)....
Trader Buys Citigroup Calls in Bet on 30% Stock Gain
A trader paid $1.25 million to speculate in the options market that Citigroup Inc. will climb 30 percent by July, a bet with a potential return of more than 300 percent, according to Interactive Brokers Group Inc.
Using a ratio call spread, an investor bought 66,000 July $4 calls and sold 132,000 July $5 calls in the first half of trading yesterday, Caitlin Duffy, an equity options analyst at Greenwich, Connecticut-based Interactive Brokers, wrote in a note. The maximum payoff occurs if Citigroup closes at $5 on July 16.
“One big player is positioning for continued share price appreciation,” she wrote. The investor paid a net premium of 19 cents per contract, according to Duffy. “The spread positions the trader to make money above the breakeven price of $4.19 through July expiration.”>>>MORE