SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Tommaso who wrote (94733)2/27/2002 5:06:07 PM
From: Knighty Tin  Read Replies (1) of 132070
 
T, A lot of that gain was due to a rise in the premium.

Shorting CEFs is tough, tough, tough. I had a paired trade on many years ago when Templeton introduced their Developing Markets open end fund. I shorted EMF at nearly a 30% premium and bought the open end fund. Just about every day I got a call "we don't know if we can borrow the shares today." What a pain. It was very profitable as EMF lost their entire premium and the open end fund out-performed them on an NAV basis. But it was a definite alligator wrestle.

How do you get a premium on a CEF? Pay out 10% a year and have avg. performance on total return. Many investors get sucked into the "yield." Most of which can just be a return of their own money.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News