4 ms·
Congrats on winning the lottery. Long term yours is a losing strategy.
by nostromo 7y ago
Congrats on winning the lottery.
Long term yours is a losing strategy.
- mc3 7y agoMore like crashing you car and getting it fixed under insurance sorts out that rust spot!
- tempsy 7y agoI use options as a hedge not a bet like some people. These hedges are short term tools.
- Donald 7y agoBuying SPY puts when vol is at historic lows is not unreasonable.
- ncmncm 7y agovol is at historic highs. literally double previous highs, last week.
- Donald 7y agoOP mentioned he purchased puts when S&P was at 3330.
- ncmncm 7y agoprice is not the same thing as trading volume.
- manigandham 7y agoVol = volatility, not volume.
- manigandham 7y agoInsurance through options is not a losing strategy. They are designed for hedging, and some basic attention to trends (all-time highs and coronavirus) can provide nice gains or protection from losses.
- mox1 7y agoWhat you are referring to is “timing the market”, which is a strategy I suppose. Just not one a lot of investors consider valid.
- manigandham 7y agoYea, because people interpret it as extremes. Anytime in the last quarter with constant news about all time highs, record low interest rates, overbought stocks with extreme ratios, and a global pandemic affecting supply chains was enough to try and allocate some attention towards a downturn with cheap bets or portfolio protection. 1-5% on puts is well within standard risk management. You don't need to be a daytrader or prophet for any of this. If you missed the drop and positions have lost value then sell covered calls for income. Then wait it out because we have an entire summer of disrupted global trade coming. Don't think about buying in until that's over.
- sf_rob 7y agoHere’s some actual analysis of rolling puts as a hedge: https://movement.capital/the-true-cost-of-hedging-sp-downside/ https://movement.capital/the-true-cost-of-hedging-sp-downsid...