yah, sure, disclose that and get canned. the SEC is looking at regulating all "brokers'" postings and/or musings on the net. so, no thanks.
ot: an illustration of points to percent was CDG a while back (pre-takeover) when it was trading at $44. The call was at $1 1/2 (if i recall). The call jumped to $6 1/2 while the stock dropped to $40 (over two weeks). the point gain on the hedge, in this case far outweighed the loss (1000 shares long and 1000 shares rep. by hedge - for ex., although that wasn't the actual position). oddly enough, the hedge held at $5 to $6 while the stock continued a slide to $33 before bouncing back to $54 before it eventually and decisively sold off (and obviously the call prices) into the $20s, then teens (thank goodness i sold in the mid $40s and $50s). interestingly, this type of movement can often occur on issues with below average volume per market cap. just another freeloaders game. point is, the same could happen to Dell. sometimes the price of the stock can bear little relationship to the price of the call; thus hedging.
you're method is abundantly better if you can get away with it. i get the same heebeejeebies reading some of the bearish posters. they must know they give off this Freddie effect to some. but, if Dell drops to $30, as some are suggesting, though, that, to me, would be a price to die for. i think $42 is more likely first, though (hope). |
