4 ms·

Thinking the same. I think the main difference is that we have inflation AND real economic constrains. Anyway what is the best way to hedge? Some say cash is ki

Thinking the same. I think the main difference is that we have inflation AND real economic constrains. Anyway what is the best way to hedge? Some say cash is king, but it is kind of counter intuitive, since inflation is high.

stocknoob 4y ago
If you want to hedge your portfolio, do a costless collar.
- MichaelRazum 4y ago
  Sounds interesting, how does it work?
  - stocknoob 4y ago
    https://www.optionsplaybook.com/option-strategies/collar-option/ https://www.optionsplaybook.com/option-strategies/collar-opt... Basically, you sell a call option, and use the proceeds to buy a protective put option. You can buy a protective put directly, but that costs money. This helps offset the cost buy selling a call. You can play with the strike prices of each to get more/less insurance depending on your risk tolerance. For example, you might sell a call 5% above current prices (expiring in a year), buy a put for 10% below prices (expiring in a year), and pocket the difference.
  - rank0 4y ago
    Careful though. Do your reading and make sure you understand those contracts. At least understand how to roll them and how exercising works. You’ll need 100x shares of whatever you’re protecting to have the contracts match 1:1
redisman 4y ago
Inflation protected securities
rank0 4y ago
It’s really tough rn. I’m of the opinion that cash is trash. There’s a million ways to skin the cat and nobody knows what’s for sure the best. It kind of boils down to an individual preference. Other comments suggest a collar or TIPS which are both fine suggestions. I wouldn’t mess with options unless you know what you’re doing. I threw a bunch of extra cash into a TIPS etf with ticker “TIP”. I’m also selling puts on commodities futures, bought US energy stocks, and bought a house last year (as rent is skyrocketing and inflation will eat away at my debt). I STILL have a shitload of cash idk what to do with… Some people like gold but I don’t get it personally. Don’t copy me I’m tolerating quite a bit of risk.

stocknoob 4y ago

If you want to hedge your portfolio, do a costless collar.

MichaelRazum 4y ago
Sounds interesting, how does it work?
- stocknoob 4y ago
  https://www.optionsplaybook.com/option-strategies/collar-option/ https://www.optionsplaybook.com/option-strategies/collar-opt... Basically, you sell a call option, and use the proceeds to buy a protective put option. You can buy a protective put directly, but that costs money. This helps offset the cost buy selling a call. You can play with the strike prices of each to get more/less insurance depending on your risk tolerance. For example, you might sell a call 5% above current prices (expiring in a year), buy a put for 10% below prices (expiring in a year), and pocket the difference.
- rank0 4y ago
  Careful though. Do your reading and make sure you understand those contracts. At least understand how to roll them and how exercising works. You’ll need 100x shares of whatever you’re protecting to have the contracts match 1:1

redisman 4y ago

Inflation protected securities

rank0 4y ago

It’s really tough rn. I’m of the opinion that cash is trash. There’s a million ways to skin the cat and nobody knows what’s for sure the best. It kind of boils down to an individual preference. Other comments suggest a collar or TIPS which are both fine suggestions. I wouldn’t mess with options unless you know what you’re doing. I threw a bunch of extra cash into a TIPS etf with ticker “TIP”. I’m also selling puts on commodities futures, bought US energy stocks, and bought a house last year (as rent is skyrocketing and inflation will eat away at my debt). I STILL have a shitload of cash idk what to do with… Some people like gold but I don’t get it personally. Don’t copy me I’m tolerating quite a bit of risk.