Reason Behind Citi Is Down!

Q: In present economic scenario all are restless and looking for quick proft to take maximum advantage from a instable market. When prices will be moderately setteled citi will be in new form. Definitely this stock is going to be $20 in 2010. Only long will qualify to win this. I am sure after BAC report it will also down.Because some people sold out citi and moved into BAC. Because after BAC result people will reconsider to enter into Citi because of undervalued stock and Citi will start moving upwards. People got the confidence in market because of other bank followed by citi performance.That validates my logic why citi is down at the present.Commments are welcome.

A: Fact -- Citi is too big to let go down Fact -- Many investors love heavily traded (secure) stocks that they can get on the cheap Fact -- Citi is one of those stocks Fact -- Day traders are buying large volumes of this stock and selling for huge profits when it inches up and down Fact -- This type of heavy buying and selling in short periods of time prevent a stock from moving much in either direction Fact -- Most individual investors buy and sell based on news and are more interested in short term gains over long term holds/investments Fact -- Professional traders know how to take advantage of the small individual investors (Another false assumption, maybe it's just institutions and financial companies playing with the stocks, statistics show only 3% of majority day traders make money) Fact -- Day traders are buying large volumes of this stock and selling for huge profits when it inches up and down (You're stating this as if the heavy buying and selling creates a balance, WRONG) Fact -- This type of heavy buying and selling in short periods of time prevent a stock from moving much in either direction (Once again, you're referring to your "day traders" or institutional trading. They create an unstable volatile stock.) -- Most individual investors buy and sell based on news and are more interested in short term gains over long term holds/investments Here's the real reason Citi is down... http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE53G5Y420090417... If everyone can get in cheaper buy scooping up preferred stock, the price between these preferred shares and common shares has to converge according to the conversion price. As uncertainty decreases (we're getting closer to the date of conversion) common shares will face downward pressure and preferred shares will become more expensive. As the article said, the 15 most active options today were all Citi options. The sheer size of the preferred shares outstanding dwarfs the common share float. This situation has the ability to push around the common share price significantly. On a side note, some of the speculative traders in the financial sector probably moved over to BAC today, as it reports.

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