Hedge for the day.

[OctopodeClub]

If you have any equity hedge ideas for the day, feel free to post them here. Just for fun.

11/10
EDZ (Emerging Markets Bear) - If US markets go down, overseas will go down since it seems to be tracking fairly well. If US markets go up, it's because Trump trade agreements are not good for anyone else but the US.

 

[oraclewizard77]

Go long the stock index, as stock market continues to go up start to buy puts. Once a longer term trend indicator is broken to the downside, sell off all stocks at once. As your puts become profitable begin to sell them off after each support is broken and then set stops on remaining puts to break even. You don't need stop for your long stock purchases since the puts themselves provide insurance and act as a hedge on your long trade.

The goal for this trade is actually not to make money on the long stock, but to make money on the puts. You could in theory also make money on the long stock trade if market continues to go up high enough that it brings up the indicator above your 1st purchase long.

 

[stevenw]

Go long the stock index, as stock market continues to go up start to buy puts. Once a longer term trend indicator is broken to the downside, sell off all stocks at once. As your puts become profitable begin to sell them off after each support is broken and then set stops on remaining puts to break even. You don't need stop for your long stock purchases since the puts themselves provide insurance and act as a hedge on your long trade.

The goal for this trade is actually not to make money on the long stock, but to make money on the puts. You could in theory also make money on the long stock trade if market continues to go up high enough that it brings up the indicator above your 1st purchase long.

The question is how much puts do you buy? if you buy large amount to fully cover your long stock positions and you need to pay premium all the time, the premium will eat up all your profit. another question is what happen if market down slowly for long time but not enough make put pay out?