STK - STK: Hedging And Yield Spread Analysis

• The Columbia Seligman Premium Technology Growth Fund follows a covered call strategy on the S&P North America Technology Sector Index.
• The strategy uses rules-based call option writing designed to seek capital appreciation, provide current income, and mitigate downside volatility.
• This article performs a closer examination of the fund in terms of income, growth, and volatility to further examine its pros and cons, and suggests a method for hedging some.
• This article also describes a method based on yield spread to gauge the short-term risks of investing in this fund at its current price, and the results show relatively thin margin of safety.

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