1Settimana·

Hims: Short idea for hedging

Good morning,

I have an idea about $HIMS (+4,11%)

Briefly about me:

I am a very big fan of Hims & Hers and bought the company for the first time at €6, and have now arrived at a portfolio weighting of around 30-40%. This weighting is a bit too high for me due to the high volatility.

Nevertheless, I don't want to sell my Hims & Hers shares because the company has so much potential and I don't want to pay 25% tax on a sale.

Hence my idea:

Hims has a high volatility in the last 365 days with an average daily performance of +-5% on 50% of the days.

So I would open a position approx. 5-10% of the Hims position but as a short! This would minimize the peaks, hedge risks and I would profit from the volatility.

So the plan is: I buy a short certificate with a 3-5 leverage and will regularly sell it on high negative performance days, and buy it again after rises to always actively hedge something against it. In the best-case scenario, this would earn me some capital (which I could then use for my semester abroad). In the worst case, I would be knocked out in the event of strong rises (with a knock-out certificate, for example) and then virtually minimize the return on the upside. However, as soon as I open a small short position, I would profit again. In the worst case, I would still profit from such a rise, but not as much as if we had fluctuations. The other small disadvantage would of course be the capital tied up in the certificate, but that would be relativized according to my calculations.

What do you think of my idea? Am I missing something?

11 Commenti

Alpalaka@Alpalaka

1Settimana

On the one hand you curse them because of the vola, on the other hand 40% is not too little for you.

That doesn't fit together

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Epi@Epi

1Settimana

The certificate provider is happy with your plan.
Statistically, that's all you get out of it. You can just as well trade with 1/4 of your position.

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DieEnte7@DieEnte7

1Settimana

@Epi Sums it up for me. @Aktienfox Can't say I haven't thought of something like this before, but it's just a side effect. Sure, if you happen to hit the exact right entry and exit time it can maximize your return and generate cash flow, but much more likely is that you will limit gains/losses in a way as if you had simply bought fewer shares. If the position is too large, partial sell or simply leave it until the other positions have caught up

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John@Doe

1Settimana

Then you make €0 when things are mediocre and what's in it for you? Why don't you just let it go Vola or not...

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Aktienfox@Aktienfox

1Settimana

@Doe simply participate in the historical volatility, if there is money on the street you can take it with you, the goal is some cash flow

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GeldGenie@GeldGenie

1Settimana

If you buy and sell it, it is not a hedge 😅 A hedge is to hedge the price of today with a long put for XY months or years from now.

Price higher: let it expire. Purchase price = price of the hedge.
Price lower = sell at the strike price

This is a hedge.

What you are describing is "gambling" or normal trading😉 And you could do this independently of your existing shares.

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Aktienfox@Aktienfox

1Settimana

@GeldGenie you're right :)) depending on the period, it can also be a hedge

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Patrick Schäfer@Hotte1909

1Settimana

So you actually want to trade 😉 um yes, there's nothing wrong with that. I also sometimes trade shares that I have in my buy&hold portfolio. Why not.
However, I don't short them, but if I do I go long at points that are good for me on the chart. When I short, it's more or less a zero-sum game. Especially if I am convinced of the company anyway.
Hedging could be seen differently. There I hedge my position over a certain period of time, but also reduce my profit.

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Pazzzi@Pazzzi

1Settimana

In my opinion, your thinking is too complicated. Either you keep your shares or you sell part of them. Personally, I have already sold ~60% of my $HIMS shares as the position has become far too large. I have used this freed-up capital to buy more passive shares. This helps to suppress emotions and act rationally.

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Aktienfox@Aktienfox

1Settimana

@Alpalaka I don't really care about volatility, as I want to keep the company in the long term. I just see an opportunity to participate in the vola. That is the primary goal!

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Shrimpman@Shrimpman

I know nothing about the sector and therefore don't know any of $HIMS's competitors, but I would tend to short it as a hedge against a general sector slump. So it's a bet that Hims will perform better than the competition.

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