GBP/USD

GU has been pretty beat since Scotland’s referendum.  Although the vote is against separation, the after effect may last longer.  I have a short in place, my target is 1.6147.  Catalyst this includes non-farm payrolls and initial claims.

gbpusd 09292014 GBP/USD

gbp/usd short trade

Concentrated stock position

Using prepaid variable forward to manage concentrated stock position.  This is a very interesting concept.  Investors can use PVF to defer taxes.  PVF is constructed with margin loan on a hedged position using zero premium collar.

For example, investor has a $100 position and hedged this position with a zero cost collar; at the same time takes out a loan for $88. Long put at 95 and short call at 110, effectively locking the pay-off to a minimum of 95 and maximum of 110.  If the stock position at expiration is less than 95, investor deliver 95 worth of stock, if between 95 and 110, the investor delivers 95, if above 110, investor deliver 95 worth of shares + any value above 110.  This action will not trigger immediate taxable event and thus effectively defers taxes until the shares deliver at expiration.