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Tuesday, August 21, 2007

New hedge

Yesterday, Weekend Trader replaced three of its four positions. It has now reached the target weight of 0.13, as discussed here. Because leverage is lower now, I needed to readjust the hedge. I also found that hedging with the Russell 2000 index tracker ETF (IWM) gives a slightly better fit than hedging with SPY.
Therefore, I sold the SPY Dec 142 puts for $6 (bought last week for $8.30) and bought the IWM Nov 72 put for $2.33.

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