Rankings   Forums   Features   Help    

pelcmarek's picture
Steve Mandel & Doug Kass


 Doug Kass,portfolio manager of seabreeze short fund: '' I recommend the use of out of the money calls (against your shorts) as a means of buying time for a short catalyst to develop (as market moves to the upside as well as the downside usually last longer than most investors anticipate)

The construction of shorts is almost as important as the short itself.As mentioned previously, this can be accomplished by buying puts, or through the protection of out-of-the money calls during halcyon times.''

 
Short seller can accomplished the task of limiting his loss by merely buying a call - probably an out of the money one against his short stock.Long call acts as insurance agains large loss for the short seller.

The shape of  long call/short stock graph is almost the same as  owning a put.The strategy is also known as synthetic put. 


Lone Pine Capital, ran by Steven Mandel. Lone Pine is an $8 Billion fund that has returned over 25% annually ever since its inception in 1997.Steve served as a consumer/retail analyst for Tiger Management back in the day for legendary investor Julian Robertson.

According to 13F filing with the SEC:

New positions:
NY Times (NYT) Puts (100,000 of them);
Sears (SHLD) Puts (986,800 of them);

Added to:
Nutrisystem (NTRI) Puts, increased put position by 278%;

Positions with no change:
Bunge (BG) Puts


PS: Do you know any other guru that is using options in his strategy? 
By pelcmarek at 2008-07-10 08:46 | Stocks | pelcmarek's blog


Shorts

I think you are adding to your shorts when the market is technically very oversold. I think a 10-15% rally is very likely from these levels.
By Bruno at Thu, 2008-07-10 10:08 | login or register to post comments

Bruno


I agree the same problem I had with longs. My purpose is to watch how it will work together long and short part and to compare long side vs S&P 500  and short vs  S&P 500 Inverse index .

Long side: http://www.stokblogs.com/user/287/portfolio (measuring my bargains nr.1-10)

Short side: http://www.stockalicious.com/stock_journal/2577 (measuring my shorts nr.1-20)


By pelcmarek at Fri, 2008-07-11 04:00 | login or register to post comments