Comments on: AORD head and shoulders – an example of when to hedge http://blog.sli-smsf.com/2009/12/01/aord-head-and-shoulders-an-example-of-when-to-hedge/ Sharing Simple Strategies for Self Managed Super Funds Tue, 27 Jul 2010 06:19:08 -0500 http://wordpress.org/?v=2.8 hourly 1 By: Christina http://blog.sli-smsf.com/2009/12/01/aord-head-and-shoulders-an-example-of-when-to-hedge/comment-page-1/#comment-77 Christina Sun, 13 Dec 2009 23:54:43 +0000 http://blog.sli-smsf.com/?p=1006#comment-77 Hi Dean Yeah probably puts won't be needed. It was also one day after the Dubai World scare so I thought better be safe than sorry. I only did a partial hedge anyway. Will close out the puts if AORD crosses convincingly above 4900 - who knows we may have other sovereign debt "shocks" out of Europe like Greece or Latvia. I don't even consider these black swans anymore - more debt defaults are inevitable. It is a question of "when" rather than "if" to me. Christina Hi Dean

Yeah probably puts won’t be needed. It was also one day after the Dubai World scare so I thought better be safe than sorry. I only did a partial hedge anyway. Will close out the puts if AORD crosses convincingly above 4900 – who knows we may have other sovereign debt “shocks” out of Europe like Greece or Latvia. I don’t even consider these black swans anymore – more debt defaults are inevitable. It is a question of “when” rather than “if” to me.

Christina

]]> By: Dean http://blog.sli-smsf.com/2009/12/01/aord-head-and-shoulders-an-example-of-when-to-hedge/comment-page-1/#comment-76 Dean Sun, 13 Dec 2009 23:38:21 +0000 http://blog.sli-smsf.com/?p=1006#comment-76 Hi Christina The H&S is getting pretty long in the tooth now. http://stockcharts.com/h-sc/ui?s=$aord Though percentage wise, I think you bought the puts at the right time. I was close to buying puts as well, but in the end I decided earnings will be up next year. While we may get a short term pull back as the market was stretched to the upside I decided that besides a black swan there was nothing to out fundamentally out there to cause a major sell-off. All the best Dean Hi Christina
The H&S is getting pretty long in the tooth now. http://stockcharts.com/h-sc/ui?s=$aord
Though percentage wise, I think you bought the puts at the right time.

I was close to buying puts as well, but in the end I decided earnings will be up next year. While we may get a short term pull back as the market was stretched to the upside I decided that besides a black swan there was nothing to out fundamentally out there to cause a major sell-off.
All the best
Dean

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