Hedges are small positions with potential for large offsets in a falling market.

We place hedges when markets are overvalued and there is a discernible catalyst to drive prices down - we try to avoid outright speculation.

Our current hedging thesis is almost played out and we need to look for exits.

In August we started talking about hedging our portfolios. The first batch of hedges expire in December and January. We are about to start running into very serious time value deterioration, so we we want to find exits on these positions. We are likely to win 3 of 4 trades and might win all four, possibly a couple of them with significant gains.To read more, a subscription is needed: Click here to subscribe