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David Pinsen
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I founded Launching Innovation, LLC, to bring together developers, designers, and academic finance experts to create easy-to-use tools to solve complex problems for investors.
My company:
Portfolio Armor
My blog:
Steam Catapult
  • Getting Paid To Hedge LinkedIn Before Its Earnings Release

    Prior to LinkedIn's earnings release on Thursday, you could have gotten paid to hedge the stock over the next several months using the optimal collar below. The net cost of this hedge was -$1,800, meaning an investor would have collected $1,800 more from selling the call leg of this collar than he paid to buy the put leg*. It will be interesting to see how the put leg reacts during Friday's market action.

    *To be conservative, Portfolio Armor calculates the costs of optimal puts at the ask; in practice, you can usually buy them for less, i.e., at some price between the bid and ask.

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    Tags: LNKD
    May 01 2:25 AM | Link | Comment!
  • Two Ways Of Hedging Infinera

    Here are two ways of hedging Infinera Corporation (NASDAQ:INFN) against a greater-than-16% 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.

     

     

    Tags: INFN
    Apr 03 1:42 AM | Link | Comment!
  • Two Ways Of Hedging DaVita

    Here are two ways of hedging Davita (NYSE:DVA), the dialysis provider, against a greater-than-15% 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.*

     

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    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.

     

    imageimage

     

    Tags: DVA
    Apr 03 1:35 AM | Link | Comment!
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