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Two Ways Of Hedging Infinera
Here are two ways of hedging Infinera Corporation (NASDAQ:INFN) against a greaterthan16% drop between now and October.
1) With optimal puts. Your upside is uncapped, but this is very expensive protection in this case: $2,900 for 1,000 shares, or 15.34% of position value.*
2) With an optimal collar which caps your potential upside at 16% over the same time frame. Your net cost in this case would be $100 for 1,000 shares, or 0.53% of position value.*
*To be conservative, Portfolio Armor calculates the cost of these hedges by using the ask price of the puts and the bid price of the calls. In practice, you can usually buy puts for less than the ask and sell calls for more than the bid.
Two Ways Of Hedging DaVita
Here are two ways of hedging Davita (NYSE:DVA), the dialysis provider, against a greaterthan15% decline between now and October.
1) With optimal puts. Uncapped upside. Cost is $1,300 for 1,000 shares, or 1.61% of position value.*
2) With an optimal collar capping your upside at 15% over the same time frame. The net cost is $1,100 for 1,000 shares, or 1.36% of position value.*
*To be conservative, Portfolio Armor calculates the cost of these hedges by using the ask price of the puts and the bid price of the calls. In practice, you can usually buy puts for less than the ask and sell calls for more than the bid.
Two Ways Of Hedging SUNE
Here are two ways of hedging 1,000 shares of SunEdison (NYSE:SUNE) against a greaterthan20% drop over the next six months.
1) With optimal puts. Uncapped upside. You pay $3.500.*
2) With an optimal collar. Upside capped at 15%. You get paid $160*.
*To be conservative, Portfolio Armor calculates the cost of these hedges by using the ask price of the puts and the bid price of the calls. In practice, you can usually buy puts for less than the ask and sell calls for more than the bid.