AIG Tumbles on Bear Valuation

3/17 - "American International Group, Inc. (NYSE: AIG) is down with most of the rest of the market as investors have reacted sharply to the JP Morgan Chase (NYSE: JPM) buyout of Bear Stearns (NYSE: BSC) for only $2/share. Investors seem to be worried that BSC may not be the only bank with overexposure to the troubled credit markets, and fear that the fallout from the credit crunch may spread to other industries. Any stock that has exposure to mortgage backed securities is seeing some fallout from the extremely low valuation of these assets that BSC received."

"For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For t...