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Politics : Idea Of The Day

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To: Snowshoe who wrote (15623)	12/16/1997 9:51:00 AM
From: Tom Trader	Read Replies (2) of 50167

HI Greg--thanks for posting the latest thoughts on WIND I will consider your comments very carefully before I initiate any positions. >>You mentioned that you would hedge your investments by buying puts in the stocks you expect to acquire. I was wondering why you are going this route, when at some other times you have hedged with index puts?<< I have always used index puts to hedge positions in the past -- but what I found this time is that the OEX/SPX held up relatively well in relation to individual sectors/stocks and so the hedges that I established did not do enough to compensate for the declines in the long positions that I am holding. Given that I am now looking at establishing some significant long positions in individual stocks, given the magnitude of the investment assuming that positions are initiated at all levels, it becomes even more critical that any downside to my portfolio is limited if we end up in a substantial decline. I know that using puts in individual stocks will make it more likely that any downside is adequately hedged. Regards

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