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no-cover
September 04, 2012
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The Synthetic Convertible Security

Richard Croft

Consensus wisdom puts forward the position that traders who buy options are speculating. But that is far too general a statement. Long only strategies the synthetic convertible – i.e. the combination of long calls and a fixed income instrument – can actually reduce risk. Traditional convertible debentures or convertible...

2482
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12 years ago
no-cover
August 20, 2012
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Fertilizer Wars!

Richard Croft

Are the sum of the parts worth more than the whole? When it comes to Agrium Inc. (AGU, Friday’s close $98.86) the company’s Board and its major shareholder (Jana Partners LLC, an activist hedge fund domiciled in New York which owns 4% of Agrium’s outstanding shares) find themselves at polar ends of a valuation spectrum....

1680
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12 years ago
no-cover
August 13, 2012
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A RIM Do Over?

Richard Croft

The shares of Research in Motion (TSX: RIM, Friday’s close $8.22) have moved higher in the last few days with the biggest spike in price occurring last Wednesday. You may recall my post on June 30th where I talked about a RIM death spiral and to my mind I see no change in the fundamentals of the company that would alter my...

1544
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12 years ago
no-cover
August 06, 2012
Other

A Preferred Share Alternative

Richard Croft

Despite the lack of guarantees normally associated with fixed income securities, individual investors generally consider preferred shares a reasonable alternative to bonds. Probably the result of the favorable tax treatment that the Canadian government accrues to dividends. To that latter point, the after tax return on...

1886
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12 years ago
no-cover
July 30, 2012
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Playing a European Renaissance

Richard Croft

Mario Draghi, head of the European Central Bank (ECB), pledged to do whatever is necessary to save the euro and the eurozone. Promising to deliver “enough” as long as it falls within the ECB’s mandate. Like any well oiled propaganda machine the most influential European politicians lined up behind Draghi and stoked the...

1608
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12 years ago
no-cover
July 23, 2012
Other

Is the Bear Calling?

Richard Croft

One can make the case that global markets have turned over and are now entrenched in a bear market phase. Global growth is slowing – particularly in China – and the eurozone collapsing under the weight of recession and political apathy. And while the US markets may be the best house in a bad neighborhood I see nothing that...

1586
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12 years ago
no-cover
July 16, 2012
Other

Seeking Alpha With Long Straddles

Richard Croft

I’ve been doing some research on the prospects of buying close-to-the-money straddles. Actually I dusted off studies I had done a number of years ago and surprisingly – or perhaps not – the results today were very similar to previous iterations. More to the point, the results seem to be the same in virtually all...

2254
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12 years ago
no-cover
July 09, 2012
Other

Hedging Canadian Content against a Global Break Down

Richard Croft

First the backdrop… We rarely hear much out of the fringe countries in the eurozone but last week, Finland’s Financial Minister Jutta Urpilainen shared an incisive point of view. She intimated in the Finnish financial daily Kauppalehti, that her country will not be a part of an “integration model in which countries are...

1602
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12 years ago
no-cover
July 03, 2012
Other

The RIM Death Spiral!

Richard Croft

Last week we bore witness to the final death spiral for what was once an innovative Canadian icon. It was not the fact Research in Motion (TSX: RIM, Friday’s close $7.54) reported its first quarterly loss. That was telegraphed to the market well ahead of time. What was not telegraphed was the size of the loss which was three...

1514
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12 years ago
no-cover
June 25, 2012
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Trading Open Interest

Richard Croft

Open interest is the number of open option contracts in a specific series that must be closed out by the expiration date. A “series” being defined as options with the same underlying stock, type (either a call or a put) same strike and expiration. Open positions can be closed prior to expiration when one executes a closing...

1701
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12 years ago
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