Monday, June 6, 2011

Short Game - Covered CRM Short Position (Again)

Bought CRM shares at just over $143 on Monday to cover the short position initiated in late May.

For those of you keeping score at home
- The first time CRM was shorted in late April  it made $8.25/sh.
- $4.48/share of these profits was "re-invested"  in a short options play around earnings and lost.
- This short trade made $6.38/sh.

Net/net this set of trades is up about $10.15/share or about 6.8% over the past 6 weeks.

Those are particularly pleasing results given
- The market is down about 3.5% since the first position was taken.  A 10.3% over perform.
- CRM is up about 2% since CCI made the call to short, yet the short position has made money.
- The investment thesis of CRM's excesive valuation dragging it down faster than other tech stock has not happened.

As they say....better lucky than good!

Now that the unlimited risk of a short position has been removed, CCI will be looking for an opportunity to recycle some of these gains into short option position on CRM.


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