Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 262.92

+0.4%

Dec 29 3:59 PM EST

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To: Jacob Snyder who wrote (57965)	12/20/2001 7:41:29 PM
From: Sam Citron	Read Replies (1) of 70976

I'm considering a long-TXN/short-JNPR combo, to hedge market risk. I don't see how this straddle hedges market risk, except rather indirectly and to the extent that JNPR has a higher beta (which hurts you on the upside). Wouldn't a long JNPR short SPX be the better hedge of "market" risk, assuming the S&P 500 was the market you were concerned about? gives me confidence [that in TXN] each [rally] got closer to 200D moving average I notice that this is true for JNPR as well stockcharts.com[h,a]dahlnyay[de][pb50!b200!f][vc60], yet you are considering using it as hedge meat. Wouldn't a stock that was a better proxy for the market and preferably one that was not as strong as the one on the favored leg of the straddle be a better choice? I'm fairly sure TXN's business will revive a lot earlier than JNPR's will. True. Wireless is expected to revive sooner than networking. However keep in mind that JNPR fell from 255 to 8 while TXN only fell from 100 to 20 so JNPR recovery might well be more dramatic, assuming it occurs at all. Caution might be warranted.

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