In a post earlier this week, we looked at hedging one widely-traded stock that was within a few cents of its 52-week high, ADM (“Downside Protection For ADM”). Another stock in a similar position Wednesday was Intel (INTC). Shares of Intel rose fractionally Wednesday, closing at 26.98, within a few cents of their 52-week high of $27.12. (more…)
In a post on Monday (“VXX Sucks”), our host Tim noted the double digit move in the VIX (though not in VXX, which has made longs’ money evaporate since inception) on the day. With volatility getting a mild bump, I thought I’d take a look at the hedging costs of a few widely-traded stocks trading near their 52-week highs. Agricultural powerhouse Archer Daniels Midland (ADM) was one that was relatively inexpensive to hedge. Here are two ways of doing that over the next several months. (more…)
One of the bigger losers on Friday, when the Nasdaq lost 110 points, was Facebook (FB), which dropped 4.61% to $56.75, a buck and change away from the near-term bottom target for the stock hedge fund manager and market technician Tim Knight highlighted in a recent post (“Social Targets”). (more…)
Shares of Netflix (NFLX) dropped nearly 7% on Monday, as Carl Icahn told CNBC that he may have sold half of his Netflix stake. In a post last month (“Investing alongside Carl Icahn while limiting your downside risk”), we presented a hedged portfolio constructed out of the holdings of Carl Icahn’s Icahn Enterprises (IEP) by the automated portfolio construction tool at Portfolio Armor. That portfolio included a hedged Netflix position, circled below. (more…)
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…)
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…)
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…)