2 ms·
Insurance through options is not a losing strategy. They are designed for hedging, and some basic attention to trends (all-time highs and coronavirus) can provi
by manigandham 7y ago
Insurance 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.