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I agree with the sentiment but you have to be careful about just assuming assets that are uncorrelated will remain uncorrelated in a black swan event. Additiona
by StriverGuy 8y ago
I agree with the sentiment but you have to be careful about just assuming assets that are uncorrelated will remain uncorrelated in a black swan event. Additionally, you have to assume that your hedge is liquid enough that it can be rolled off in times of need.
- marketgod 8y agoI am not a mathematician or I would be able to do this better. Basically you can buy calls and puts to simplify it. This way a shift upwards/downwards will cause your options to shift inversely. You end up being liquid in that event and can continue to switch your position to the short side or long side. I however only buy options based on my sentiment of the market, bear or bull. Currently it's a bull market, S&P going to $300. Edit: Fixed buy calls and puts.