6/4/25 - $bug - Love cyber. But short hedge.6/4/25 :: VROCKSTAR :: NASDAQ:BUG
Love cyber. But short hedge.
- while the moon bois r back to leveraged long stonk
- i'm, yet again, taking the opposite POV and spending 80% of my time finding out how to keep a high cash, well hedged book which means finding strategic shorts and hedges
- NASDAQ:BUG is an interesting candidate b/c the IV on a lot of these multi-month ATM puts r in the 20-ish land, that's mental considering... the individual names are all (equivalently) in the 40s IV... and trade 15-30x sales.
- these names r some of my favorites, but the bounce has been so intense 50-100% for many... that it's hard to see that if/ as we go higher these are somewhat constrained by profit taking and on the downside... they revert to mean much faster
- take for instance #2 holding NASDAQ:CRWD today. EPS just not rewarded. 25x sales. sure sales growth great, mgns "great". but let's put the reality glassed back on.
- by no means do i think crwd is a LT short. but if you're going to give me 20-1 leverage ATM on something like this for 20 IV... i'll gladly use that hedge
- for about a 1% position, i'm able to get ATM 20% effective gross hedge on names that r not pushing higher?
- always miserable biz to short/ hedge. and if anyone knows, it's me. i used to do this professionally. it's the most thankless business on the planet. you win... while everyone else loses... you still feel like sht. and if u lose while mkt moves higher (or underperform) you feel like sht. but you do it because it's sometimes the most prudent thing to do
- again 1% of book... 20% gross short ATM for these names for 3 mo of protection and i'm riding +20% ytd... seems like a good use of capital esp against my more illiquid gas name $gamb.
let's see. just flagging that often times if u want to short a single name, you're best off evaluating the WHOLE sector to see if an ETF is large enough ( NASDAQ:BUG is >$1 bn AUM) and likely the IV will be a whole lot lower than these single names.
alas who knows. just an idea.
V
