7/2 – Hedge Adjustments

07/02/2008, at 6:51 pm

Today we made several adjustments as the market worsened during the day.  The majority of the activity involved rolling Short Calls down on several of our Core LT Long positions as well as a few other adjustments summarized below to reduce our risk and tighten many of our hedges.

• ATVI – Rolled our Short 35 Calls down to the 32.50 strike for a $.96 Credit
• ELON – Rolled down our Short 12.50 Calls to the 10 strike for a $.75 Credit and BOUGHT Long the 12.50 Calls as an Upside Hedge for $.15
• IDCC – SOLD our 25/22.50 Put Spreads for $.70 (Cost = $.48) and then SOLD the JUL 25 Puts Short for $1.10  We also BOUGHT 50% of the AUG 25/22.50 Put Spreads for $1.00  Finally, we SOLD our Long 30 Calls (Upside BO Hedge) for $.40 (Cost = $.35)
• HLF – SOLD our JULY 40 Calls (Upside BO Hedge) for $.65 (Cost = $.90)
• MVL – Rolled our Short JUL 35 Calls down to the 30 strike for a $1.83 Credit
• SOLF – Rolled our Short JUL 17.50 Calls down to the 15 strike for a $.65 Credit, and BOUGHT the JUL 12.50 Puts for $.50
• SNDA – Rolled our Short JUL 30 Calls down to the 25 strike for a $.76 Credit
• SNDK – BOUGHT a 50% Upside Hedge on the strong move up in a bad market with the JUL 22.50 Calls for $.20

We apologize for not being able to post these as we executed them but due to heavy client phone activity today we were forced to make most of these adjustments during the last hour as the market worsened and the combination of Member Trade Support and adjustments to our Core positions prevented us from posting until after the close.

This is another example of our intention and plan to lighten up on our Long Portfolio exposure by JULY expiration.  When you find yourself in the position of having to make regular adjustments to LT positions, that is a sign that you should cut back your exposure, raise cash, and wait for the market to make a definitive turnaround.

Coach BD

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