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Hello investors! I am looking to split my SPY allocation into 3 separate ETFs: one for Growth sectors (consumer discretionary, tech, communication), another one for Defensive sectors (staples, healthcare, utilities) and another one for Cyclical sectors (energy, materials, financials...

As we know, when you invest in stocks/ETFs, you can buy a leveraged protection from unexpected left tail risks by buying OTM puts on the underlying, or calls on VIX, or other similar option-based strategies. That is easy. Well, I am currently invested in certain credit-based instruments subject...

I have been running some test scenarios in long term outlooks, meaning buying calls 2 years out, comparing the two following alternatives to stock owning: Buy 1 deep ITM call (delta around .90) Sell 1 call ATM (delta .50) and buy 2 calls ITM (delta around .70). I have also played with 1 x 3 at...

The Fed, as an institution and contrary to what many people believe, is not independent from the Governament. It responds to the congress as per the 1913 Federal Reserve Act, and thus it is implicitely bound to political mandates (and agendas). Therefore... There is zero chance, literally zero...

That is not the point of the thread, so please stop highjacking it. The OP's desired theme of discussion is to find synthetic alternatives to buying the stock. OTM calls, while might have other qualities, do not achieve that. It is time to let it go and let the thread rail back to what the OP...

Very interesting idea, I can certainly see the benefits of removing most of extrinsic without having to go deep ITM. Do you have any resources or material to read more on this approach?

Thank you for the response. I am not sure I understand though: would you mind explaining how selling the put at the same strike would close my long LEAP? Thanks!

Hey option traders, what would you think of the following scenario? Imagine you bought a call LEAP and price has been moving in your direction. So much so, in fact, that Delta is now well over 90 and, while there's still plenty of time left to expiration, there's not much extrinsic value left...

US debt is, now a days, sitting at around 130% debt-to-GDP ratio. Most macro analysts say that, at such high levels, the Fed can't allow rates to raise too much at any point through the yield curve, or else everybody and their mother would default: the Govt itself, all the zombie corporations...

Thank you everyone for your responses. If I was to play this hedge with a LEAP call (or put) option rather than actually buying into the underlying, what vehicle would be more appropriate? Remember, the goal is to sacrifice a small and controlled (fixed) percentage of the portfolio, aiming for...

My overall portfolio is a bit heavy on the dollar-bearish theme (commodities, emerging markets, etc), so I would like to allocate a small portion into an asymmetric hedge: if dollar rallies, the hedge would sky rocket. What do you think are the asset classes or markets that would benefit the...

Thank you for the responses. My rationale to consider buying a shorter term put against the long term synthetic stock was to cherry pick the specific moments where I feel there might be some volatility without having to pay the full price of the 2-year long call. That way I walk into the trade...

Let's imagine the following scenario: Your outlook on a particular security is bullish in the long term (2 years), but you reckon there might be some volatility in the short term (next few months) from which you want to protect yourself. Based on this, which of the following two positions...

Hey LanceJ, I find your post most interesting! Mind if I ask 3 questions? This is fascinating. I would assume that buying 4 Puts would necessary if he intended to sell/roll the long Put before expiration in order to keep the option price locked with the stock price. However, if he just seeks...

Let's assume the following profile: Retiree looking to yield his lifelong savings capital. Steady income and fighting inflation for an average 10% yearly return would be preferred over sheer capital growth and, potentially, large volatility. Does not mind to actively manage the portfolio, but...