Post by
AnEducator on May 20, 2023 12:23pm
Enormous Premium
Short selling DFN is immensely compelling, but then again, has been for several months. I have assumed a position as a hedge against my long positions, but knowing I will need to pay the $0.10 dividend, perhaps for several months, is quite discomforting.
As of April's update, the fund is holding 18% cash, so investors are willing to pay in excess of $1.36 for each of those dollar bills held in cash. LOL.
Has anyone here been holding short for a long time, and are you at all concerned?
I expect this fund to trend towards the likes of DGS, and end up paying only sporadically over the next few years.
Comment by
Mmb060 on May 20, 2023 2:29pm
DfN and GDV are my two biggest shorts. Yes baffels me to see it trade at huge premium. But the continual payments of distribution has put DFN even closer to non payment. We shorters are just one downturn away from suspension of dividends. I think DGS is unlikely to pay many distribution going forward. The Teck buyout offer saved them a bit of time.