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Bailout Bonus: National City (NCC) up by over 65%

Today's Financial News - Posted October 1, 2008

There are lots of big winners on the Street today. Companies like Thornburg Mutual (NYSE:TMA) and Bank of Granite (NASDAQ:GRAN) are up by over 50%. Even better, shares of National City (NYSE:NCC) are up by over 65%, handing us gains that are closing in on triple-digit territory.

By Andrew Snyder

Baltimore – (TFN): Even with the equities markets hovering in slightly negative territory, there are some big movers out there today. It is no surprise the ten largest percentage gainers are in the financial industry.

Companies like Thornburg Mutual (NYSE:TMA) and Bank of Granite (NASDAQ:GRAN) are up by over 50%. Thanks to another round of bailout voting promises, many of the companies that had their valuations unfairly destroyed by the sinking of the nation’s financial powerhouses are climbing back where they belong.

It has been a tumultuous couple of weeks, but for savvy traders it has spelled big profits. At last count, investors have a shot at two dozen companies making 30% or better gains today. It is a rare gift, especially considering all the stories of impending doomsday.

Fortunately, one of the companies on the big-gainer list is one that I recommended buying yesterday in my volatility hedge. In case you have not noticed, shares of National City Corp. (NYSE:NCC) are up by over 65% today.

Big gainer, big profits

If you took the simplest route and bought shares of the underlying company, you have plenty of reasons to celebrate. And if you followed my advice to savvy traders and bought the National City January 2.50 Calls (NCCAZ.X), you have even more reasons to celebrate. Your position has grown by over 80%.

Congratulations on the gains, but do not lock them in just yet. Tomorrow will bring another day of rebounding action for the entire financial sector. As we get closer to a finalized bailout bill, the market will continue to strengthen.

Right now, politics rule Wall Street. The Senate is expected to pass an updated version of a bailout package at about 9:30 tonight. But the House will not have its chance at redemption until at least Friday morning. Rules are rules.

That means we have at least one more day of uncertain action. If you are a long-term value investor, you need to buy everything you can get your hands on at these prices. And if you are a short-term trader, keep an eye on your computer screen. There are lots of profit opportunities out there, but you have to act fast.

If you need some help deciphering the situation, keep your browser locked on TFN. The instant profitable news hits, we will let you know.


Next Article: Seeds of Wealth: The problem is not where to look for profits — it’s what not to buy!

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Posted by Andrew Snyder · Filed Under US Stocks and Markets 

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