Lehman ABS CorTS 2001-08 7.375% General Motors (CCYPQ)

[Enterprising Investor]

A classic arbitrage opportunity (in theory).

Buy 1,000 shares of CCYPQ representing $25,000 par amount @$1.80. Value = $1,800.00

Sell short 25 bonds of GMGM.GF bonds representing $25,000 short @11.95. Value = $2,987.50

Deliver stock and warrants received in Ch 11 reorg to close out short position.

Profit = $1,107.50 with ZERO risk.

[Commissions excluded for illustration purposes]

Making this a reality is difficult for retail investors. Buying CCYPQ at a "fair price" may be difficult. I tried last week to get fills from $1.60 to $1.80. Needless to say, it would get easier as CCYPQ approaches $2 or the GMGM.GF decline to 10.