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Alex Gavrish This article was authored by Alex Gavrish, founder and CEO of Etalon Investment Research, and author of "Wall Street Back To Basics."

With activist investors more active than ever, more and more attention is being paid by investors to the investments they make. Publicity often reduces hedge funds maneuverability and ability to trade positions quickly. Fund managers don’t rest on their laurels and take proactive steps to better manage risks and rewards. This week’s investment by Jana Partners in shares of PetSmart Inc makes for an interesting case in point.

Jana Partners discloses PetSmart stake On June 3rd, 2014, an activist hedge fund Jana Partners disclosed a 9.9% stake in shares of PetSmart Inc, a specialty retailer of products and services for pets. Its position consists of an outright stock purchase of 5.09 million shares acquired at an average cost of $58.07 per share, and call options on 4.73 million shares with an exercise price of $50 per share, expiring in September 2014. The average cost of shares that would be acquired by exercising option contracts is $59.63 per share. The combined average cost of the position would be $58.82 per share.

Some activists proactively manage risk The pattern of acquiring part of the position through options is not new to Jana Partners. Las......................

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