Tag: hedge

To Hedge Your Portfolio For Free

| June 16, 2022
To Hedge Your Portfolio For Free

An intriguing way to hedge your portfolio’s downside risk for essentially no cost is by using a put spread collar. A large zero-cost put spread collar was placed last week on the SPDR S&P 500 ETF (SPY).  The trader sold calls and used the proceeds to purchase a put spread.  The position will give a […]

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Stocks Are Plunging – Is Gold The Right Hedge?

| February 28, 2020
Stocks Are Plunging – Is Gold The Right Hedge?

When the stock market does its best impression of a swan dive, it tends to come from an unexpected catalyst. It’s generally not something about interest rates or corporate earnings or jobless numbers. Those factors matter over time, but they don’t usually cause sudden, severe moves in the market. No, very large selloffs often come […]

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A Quick Way To Hedge Your Portfolio Into The New Year

| November 12, 2018 | 0 Comments
A Quick Way To Hedge Your Portfolio Into The New Year

Despite the volatility and heavy stock selling in October, many analysts are expecting the remainder of 2018 to be bullish. The S&P 500 was only up 3% year-to-date after the October bloodbath (prior to mid-term elections), so it stands to reason that stocks are more likely to go up in the final two months of […]

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Hedge Ratio

| March 27, 2012
Hedge Ratio

A hedge ratio is the overly complicated term for a rather simple idea. Essentially, the hedge ratio refers to the delta of an option.  Delta is the amount by which the underlying option will change in price for small changes in the stock price. Remember, an option with a delta of 0.50 means the option […]

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