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I ended up saving my investment portfolio buying put options on the S&P and getting my portfolio to a yearly high even though my stock holdings dropped in value

• nostromo 7y ago
  Maybe. Or this will be another V event like Christmas 2018 and you'll have lost money buying an unnecessary hedge. If you need the money in 2020, hedging makes sense. If you don't, don't.
  • tempsy 7y ago
    I took profits already so left with a smaller hedge. Definitely will not lose more than I would’ve if I had done nothing, even if it goes to 0, which is unlikely given the high volatility.
    • benmanns 7y ago
      Implied volatility on one week puts is around 60% right now. Downside protection is very, very expensive, even if it does work sometimes.
      • tempsy 7y ago
        I’m playing with house money at this point, and bought on Friday and Monday/Tuesday before IV got massively inflated. No good news came out this weekend, if anything it’s only gotten worse. A V shaped recovery is unlikely, but if it does go up this is a hedge, not a bet, and my portfolio is net long.
      • AznHisoka 7y ago
        Hedging is only effective when you don't need it. Sort of like home insurance - you don't buy it when you house is already burnt down - the premiums will skyrocket and it doesn't do you any good. Last week, and Monday afternoon was probably the last opportunity to buy hedge at a decent value.
  • claudeganon 7y ago
    The US economy is a house of cards in terms of its ability to withstand the impacts of a real pandemic. Aside from all the supply chain disruption, it’s already fragile healthcare infrastructure and lack of things like sick leave protections are going to make mounting a response that would stabilize markets very difficult. China is continuing to take drastic short term action (and a corresponding hit) to provide a floor to the damage to their economy. The US seems unlikely (maybe even incapable) of mounting a similar response.
    • luspr 7y ago
      Do you have any facts to back that up? Leadership issues aside, the US is clearly the country that is best equipped to deal with a pandemic (see https://www.ghsindex.org/ https://www.ghsindex.org/).
      • claudeganon 7y ago
        All of that is well and good, but just look at the reality of South Korea vs the United States right now. Korea is doing 10,000 test kits per day with drive up stations, while the US has had botched testing, nonsensical requirements for the testing that’s in place, and undetected community transmission for about six weeks with no mitigation plans. There’s likewise been no federal or state level action to do things like curb mass gatherings or strictly enforce quarantines, which are literally the only thing that has proven effective in curbing the spread to ease the strain on healthcare infrastructure. Also, leadership issues aside is a big aside. Having the most incompetent and corrupt administration in recent US history helming the response to this, including someone who caused a public health crisis in his own state and a self-serving pharmaceutical industry lackey is about the worst you could ask for.
        • dboreham 7y ago
          The current US government plan seems to be "let everyone catch the virus and pray it isn't too bad".
      • heartbeats 7y ago
  • deleted 7y ago
    [deleted]
• aguyfromnb 7y ago
  >I ended up saving my investment portfolio buying put options on the S&P and getting my portfolio to a yearly high even though my stock holdings dropped in value. Finance Internet Rule #1: unless you're going to post a screenshot of your account and profits, don't brag about a trade. Everyone's an anonymous stock market genius, you know.
  • cableshaft 7y ago
    Hi, nice to meet you. I am an anonymous stock market genius.