Stop overpaying for protection

Your hedge is expiring. Vol just spiked. The obvious move is to roll into another put.

Don't.

Those puts are pricing in 7-8 vol points above where they were last week. You're buying fire insurance while the house is already smoking.

I see this constantly. Traders with the right instinct (hedge the book) but they execute at the worst possible cost. They feel protected. Their P&L says otherwise.

What works when vol is elevated: put spreads. Buy the put you want, sell a lower strike to offset the inflated premium. You still get defined protection without overpaying.

Sure, your protection has a floor. You're capped on how deep it covers. But that floor is usually well below where you'd be managing risk anyway.

Plus, if you get a bounce in the market, you can do things like sell calls and buy back the lower puts.  Staying flexible and trading around the volatility the market gives you reduces the drag of constant put buying.

When vol is high, structure matters more than anything. The wrong structure turns a smart hedge into an expensive drag on your book.

Structure must match view + vol regime. Always.

Volatility first.