The investor responsible for the transaction may be taking an outright bearish stance on the stock, or may be using the position to hedge long stock in DNKN through earnings.
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The investor may be employing the three-way spread to take finance an outright bearish view on the stock, or could be using the trade to hedge a long position in the underlying shares.
To this must be added the usual lack of clarity about what goes on in the hedge-fund world.
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Alternatively, the trader may be cautiously optimistic on the pharmaceuticals giant, establishing the put spread to hedge a long position in the underlying shares.
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The investor behind the transaction may be implementing the spread to hedge a long position in ADS shares, or may be establishing an outright bearish stance on the stock.
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So while commercial real estate could be a good inflation hedge, it depends on the strength of the local market in which the individual asset competes.
This critique seems to be based on the notion that Berkshire Hathaway is an equity hedge fund or investment club, instead of a portfolio of operating businesses.
Recent high oil prices can be blamed as much on the cheap U.S. dollar and hedge fund speculation as on peaked supply and rising global demand.
But flotations also force hedge-fund managers to be more transparent, diluting the mystique on which their high fees partly depend.
Suspected natural gas reserves have yet to be proved, but they bear the potential to help Europe hedge against uncomfortable reliance on energy from Russian pipelines.
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If you are looking for equity put plays, we recommend hunting in the large-cap technology space, as hedge funds appear to be bailing on these equities.
From now on, neighbours will be able to involve their local council in disputes over the height of a hedge.
Democrats, of course, will be able to add their own rhetorical flourish by linking the payroll tax cut to tax hikes on hedge fund managers and oil companies.
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The banks buying and selling the swaps may be doing so to hedge, speculate or earn a cut for acting on behalf of pension sponsors, hedge funds and other clients.
Traditionally gold is supposed to be a hedge against bad news, but as the focus of momentum traders, it goes up on good news and sells off on bad news.
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In November, Delta and UAL shares soared after hedge fund Pardus Capital Management tried to push the two together (See "Airlines May Be On Course To Combine").
Also, the capacity constraints imposed by certain investment strategies mean a limit may exist on how much capital can be employed by a particular hedge fund without negatively impacting its returns and, thereby, the lucrative performance fee accruing to the fund manager.
Whether sports team ownership distracts hedge fund managers, is a sign their investment focus is fading, or the correlation is just a coincidence, anecdotal evidence on the connection, which has been noticed by those who follow hedge funds before, seems to be getting stronger.
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