the strategy depends on price volatility vs absolute delta. say you lose 40% on a long position over 90 days, but volatility was 5% every 3 days, you could theoretically make 110% profit (150% shorting profit less the 40% loss on the long position). You would still make a profit shorting a third of you long position, which is what regal does. And as it is only a third, they won't lose out if a fabled announcement increases the SP 10 times...
The Regal Australian Long Short Equity Fund invests using a long/short approach and allows investors to benefit from both the rise and fall in the value of selected Australian companies. The fund uses an active extension or “130/30” style and seeks to outperform the S&P/ASX 300
LOM Price at posting:
5.1¢ Sentiment: Sell Disclosure: Not Held
