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.
Strategies & Market Trends : Convertible Hedge investors?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Ted S who wrote (50)1/22/1998 5:36:00 PM
From: chevalier  Read Replies (1) of 107
 
I have never done the Abrams method as it is only effective with an extremely volatile stock. As well because you are only shorting half the amount you buy in bonds you need to put more money up front to get the same leverage. The full hedge if you can pick them offers a much better return. Abrams method is effective if you find it difficult to spot stocks in downtrends. I set up positions based on the technical merits of the common. When I see a downtrend starting on a stock I take my position. Abrams methods for picking convertibles is correct. You need to look for high yields and coupons, low premium(as this is the money that you put up front), and bonds trading at less than par.

Hope this helps,

Ari
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