Hedging
Posts about hedging a portfolio — protection sizing, when to hedge, when not to hedge, and hedge effectiveness.
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Hedges should lose money
Your hedges should lose money. That's the whole point. If your put spreads bleed in a rally, good.
Two books or one?
Do you run two mental accounts? "My portfolio" over here. "My options trades" over there. Completely separate books.
Why I rolled into a put fly
SPX at 6,380 and I just banked profits on my put spreads. A sharp squeeze higher is building...
Your hedge is bleeding you dry
Buying puts every month to hedge your portfolio is a guaranteed way to bleed money. Most puts expire worthless
Stop overpaying for protection
Your hedge is expiring. Vol just spiked. The obvious move is to roll into another put. Don't.
61% hedged. And I'm taking it lower.
"Hedge your entire portfolio so you're fully protected." Sounds responsible. Until you do the math.
Not all put buying means the same thing
"Record put demand, must be close to a bottom." I keep seeing this take. And historically, heavy put buying does line up with bottoms.
$50 billion moves a $50 trillion market
The US stock market is worth $50 trillion. The amount that actually moves it on any given day? About $50 billion. One one-thousandth.
You may be hedging away your edge
Implied correlation used to sit around 60% when I started running dispersion. If you liked a single-stock position, you had time.
“Hodler” isn’t a plan. It’s an unpriced exposure.
Are you one of those traders thinking “risk management” starts after the entry?
Being hedged can still be a mistake
BTC moved into support. I’m still fully hedged on my crypto exposure.
Most hedges solve the wrong problem
A lot of traders react to moves that aren’t actually risky. They’re just uncomfortable.
When the market pays for insurance into strength
Yesterday morning looked clean on the surface. SPX pushed higher, flirting with 7000.Tech earnings were out of the way.