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Alpha Exchange
Cuban’s Collar is Jensen’s Alpha
Jun 27, 2024
Jensen Huang, owner of NVDA shares, discusses Mark Cuban's well-timed collar trade on Yahoo and its wealth accumulation impact. The podcast explores collar trades, Mark Cuban's investment strategy, and Jensen Huang's wealth management opportunities through options trading and hedging strategies.
16:47
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Quick takeaways
- Implementing zero-cost collars can protect wealth by reducing stock price sensitivity and limiting potential losses, as demonstrated through Mark Cuban's strategic trade with Yahoo.
- Understanding the factors influencing collar pricing, such as Delta, Vega, and interest rates, is essential for effective risk management and wealth accumulation in investing.
Deep dives
Jensen's Alpha and Collar Pricing
Jensen's Alpha, a calculation widely used in the industry, is explored in an unconventional manner in this episode, focusing on wealth retention instead of creation. The podcast introduces collar pricing, a hedging trade involving puts and calls on owned stocks to create a protective band for stock movement. By selling a call to finance put protection, investors reduce stock price sensitivity and ensure limited loss potential, as demonstrated through Mark Cuban's strategic collar trade with Yahoo.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode