STI Hedge Fund July Performance.

Like the Federal Reserve I am all out of bullets after July trading.  The limited number of trades available within the asset base of the hedge fund going into July led me to believe the performance for July would be sub par. However the month was improved because of some unusual volatility pricing and us taking advantage of a couple of reserve positions that offered premium value due to the volatility. So we get to report a stellar month of 21.63% annualized profits for the month.  This improves our year to date performance to 16.8%, which still good is below our 18% goal.

 

Trading profits this month were drove primarily by oil stock options and tobacco stock options. Real estate option trading contributed nicely as well.  We also got a boost from an improved trading expense agreement with our broker. Add in that we got a nice swap on the cost of interest expense and dividend income. In all a superior month.

 

Looking forward to August as we noted all bullets have been used and we have the smallest number of positions to trade this year, so a repeat performance is not to be expected. The good news is that almost all of our positions coming up for trading are our best performers. I do not expect to get any assigned post ions back this month since the world's markets, including the US market, remain in turmoil due to the budgetary impasse here and the Greek situation in Europe. We did get a couple of unexpected positions back during July. As expected our carry forward losses improved during July, significantly for SCCO, which never was a concern. FTR and WIN continue to be losses we will realize at year end. The new one, and totally a surprise, is CTL. CTL got hit with arbitrage selling due to an earlier merger with a small firm so even there we expect the price to stabilize nearer year end. A note on carry forward losses. Due to the nature of put option trading the fund regularly has paper losses, but the vast majority of these losses are soon gone due to call option put backs.  However in the current market due to the uncertainty in Washington DC and the GDP number this morning a traders screen can look scary red and takes serious nerves to keep held positions.

 

We will continue to hold almost all positions in the fund in high quality dividend paying securities due to the weakening economy and political concerns currently. We have reduced our number of holdings to 21 stocks, of which 2 are speculative, 3 are being sold out of the fund, so we are left with only 16 going forward for all our basic trades.