My bi-directional trade on CXW. Michael Burry likes it too!
Similar to my approach with SLV that is linked, I opened a long position in CXW, hedged by 3/19 7 puts.
CXW is low volatility, which means options are cheap. So:
1) If it breaks free through resistance, I make money on the long stock, lose my hedge, but I dont care, bc the hedge is cheap.
2) If it bounces down sharply because of the market sell-off, my hedge will work and I will be either net 0 or modest profit.
3) If nothing happens, I lose my hedge money, but its cheap anyways.
And Dr Michael Burry has it in his portfolio in Scion, so why not?
CXW is low volatility, which means options are cheap. So:
1) If it breaks free through resistance, I make money on the long stock, lose my hedge, but I dont care, bc the hedge is cheap.
2) If it bounces down sharply because of the market sell-off, my hedge will work and I will be either net 0 or modest profit.
3) If nothing happens, I lose my hedge money, but its cheap anyways.
And Dr Michael Burry has it in his portfolio in Scion, so why not?
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