Biotech stocks took a beating on Friday, with the ETF that tracks them, iShares Nasdaq Biotechnology (IBB), down 4.74% on the day. One of the harder hit biotechs was Biogen (BIIB), which was down 8.22% on the day. Despite the drop, Biogen had one of the 10 highest expected returns of the securities in Portfolio Armor’s universe as of Friday’s close. In case its actual return over the next several months ends up being in the opposite direction, here are a couple of ways to hedge it. (more…)
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Two Ways Of Hedging SanDisk
Shares of SanDisk (SNDK) hit a 52-week high intraday Wednesday, as the stock was added to the NASDAQ Technology Dividend Index. For those long SanDisk, here are a couple of ways to hedge it over the next several months.
1) Hedging With Optimal Puts
3.8% cost. Uncapped upside.
As of Wednesday’s close, these were the optimal puts* to hedge 1,003 shares of SNDK against a greater-than-20% drop over the next several months with optimal puts. (more…)
Two Ways Of Hedging Gold Miners
In a post on Wednesday (“Gold’s Bull Market”), Tim highlighted a breakout in the chart for the gold-tracking ETF GLD. Last month, Tim noted he was bullish on gold miners as well in the longer term, though they could face a pullback in the shorter term. For those long the Market Vectors Gold Miners ETF (GDX), here are a couple of ways to hedge it over the next several months. (more…)
Another Week, Another Warning
Another Week, Another Warning
As the cyclical bull market that started in March 2009 has ground on, it seems that every week we’ve had warnings about its imminent end. On Friday, Market Watch columnist Michael Sincere weighed in with “Seven Signs We’re Near A Top”. To save you a click, here is a sample of Mr. Sincere’s analysis: (more…)
Constructing A Hedged Portfolio Around A Priceline Position
In a post last week (“Priceline’s Wild Ride”), Tim noted that Priceline (PCLN) was up 7400% since its 2003 nadir. In this post, I’ll go over how an investor can build a hedged portfolio around a position in Priceline, and show an example of one. Let’s quickly review some of the basics of hedged portfolios, and then see how we can go about creating one around a Priceline.com position for an investor with $1,000,000 to invest, who wants to maximize his potential return while limiting his downside risk to a drawdown of no more than 17% in a worst-case scenario. (more…)
