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Strategies & Market Trends : Convertible Hedge investors?
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To: Jack Zolty who wrote (20)6/9/1997 11:47:00 PM
From: Lorne Larson   of 107
 
Scott and Jack

Thanks for the informative responses. I find the convertible/short play fascinating because of the great risk/reward position it gives you. Seems to me that with the right entry point and the right hedge ratio it is very difficult to lose. The fact that very few retail investors play this game (as indicated by the tepid response to this thread), while the institutions do (as indicated by the large short positions on almost every company that has a convertible out) also tells me that this play is a good one. I suspect that the average retail investor simply finds the whole thing a little too complicated.

Let's keep this thread going. Let me know of any positions you've put on and I'll do the same. Also can keep each other informed as to
any books, articles, etc that deal with this subject.

By the way there is a new trust on the market in Canada that is set up to specifically play this hedge. It's called Polar HEIT and trades on the TSE as PHT.IR. They intend to distribute quarterly just like a royalty trust. I bought some units for my RRSP because its semms like an easy way to play this game. Don't know if you guys are Yanks or Canucks - there are probably a number of funds, etc that are set up for this approch in the U.S.

Regards
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