High Optimal Hedging Costs Offer Another Warning

In a previous post, we noted that we’d seen several examples of high optimal hedging costs presaging poor performance in a stock. This is the most recent example.

Last week, we noted the high optimal hedging cost for Zynga could be a warning:

This was the “last tweet re $QQQ” referred to in the tweet above.

Zynga tanked almost 18% today after posting a net loss of $435 million, on a $510 million charge associated with stock-based compensation issued to its employees.

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Eminent securities attorney, irreverent Wall Street blogger, and proprietor of BrokeandBroker.com.
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