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Thanks for pointing it out. I edited the title to say "drop in your stock" rather than Market drop. Agree on the indexes part. Say for example one has $GOOGL o

Thanks for pointing it out. I edited the title to say "drop in your stock" rather than Market drop. Agree on the indexes part. Say for example one has $GOOGL or $AAPL in the $100K range. A 20-30% drop would wipe out a solid chunk. Maybe planning to take out some in a year or so for a downpayment ..etc and the stock is down that much. Now you are left waiting out for N years for the correction to play out. Why not then spend say a couple of thousands, get some puts and hedge?

ChuckMcM 9y ago
Fair enough. There is a challenge though which I've experienced first hand which is you own a stock which has become the biggest part of your portfolio but you can't trade it freely because you work at the company. That includes buying options on that stock, and it would include buying "insurance" which was a proxy for buying options on your stock. The only solid advice there is sell it when you have a chance to and move it into something you can trade and/or buy options on. If you don't work at the company whose stock is the 'big chunk' then it is easy, sell half and use the proceeds to buy into an ETF. Then you're risk goes from a 20% reduction becomes a 10% hit. Having all your eggs in one basket, especially a tech basket, was how a lot of people experienced a lot of loss in the dot com blowup.