*** NAB - downside as Abbey merger talks hits wal

It was reported in te UK major newspapers on the weekend that the merger talks between NAB and Abbey National in the UK had broken down and that a hostile takeover by NAB for Abbey National is more likely now. In this event 1. they are likely to suspend their buyback for an interim period 2. Likely to pay more than they otherwise would have if they had not to make a hostile bid and therefore perhaps pay more than the market would like them to.

The short term uncertainty should see a cap in the share price in the near term. It remains a short term trading sell with a target around $33.80. Keep you stop loss (stop on close (end of day)) around $34.82.

Strategy:

Buy Put options/warrants/options spreads
Sell Call Option Spreads