Hedging my portfolio...

[GaryBtrader]

There's no such thing as a micro e-mini. There is the full, the e-mini, and the e-micro.

Please get that correct.

Sure looks like a micro e-mini to me:
https://www.cmegroup.com/trading/equity-index/us-index/micro-e-mini-futures.html#

 

[Overnight]

Sure looks like a micro e-mini to me:
https://www.cmegroup.com/trading/equity-index/us-index/micro-e-mini-futures.html#

I stand corrected. My apologies to the forum for not knowing the terminology.

It is very rare that I get to do this, but Overnight has...

My own fail horn! Whoop!

 

[TimtheEnchanter]

absolutely not and this is the reason why

https://www.splithistory.com/uvxy/



when?

but, but ... if you can time the pop & drops, go right ahead

....in April.

 

[deaddog]

I have a portfolio of spyg, spyd, spyv with some covered calls. (I do not have covered calls on spyg). I am expecting a correction but I do not wish to sell. What is the best/cheapest way to protect? I am looking to buy UVXY...

Why don't you want to sell.

 

[never2old]

....in April.

back to @OptionsOptionsOptions options post on page 1

rather than complicate things ... if you are sure your holdings will drop, why not sell them & move back in when they drop to a level that you feel is the time to go back in?

 

[ET180]

You could sell micro e-mini S&P contracts, one per every $20K you're trying to hedge. Direct hedge against your current positions, no drag like options.

What's the point? To gain a dollar on the SPY position but lose a dollar on the futures? There's not even a tax advantage to doing that.

 

[GaryBtrader]

What's the point? To gain a dollar on the SPY position but lose a dollar on the futures? There's not even a tax advantage to doing that.

There can be a tax advantage if you don't want to sell your long positions and trigger a capital gain. You can basically neutralize your portfolio for however long you want and not actually have to sell your positions.

 

[ET180]

There can be a tax advantage if you don't want to sell your long positions and trigger a capital gain. You can basically neutralize your portfolio for however long you want and not actually have to sell your positions.

SPY if held for longer than 1 year has 100% long-term tax treatment. The futures are 60/40 long term / short term treatment regardless of how long they are held. So if the SPY position loses, you'll give up gains that would be taxed at the preferable 100% long-term rate in exchange for gains on the futures contract that will be taxed at a relatively higher rate. That's still preferable to not having the hedge, but it only really makes sense to do if you're sure you can or want to hold the SPY position for long enough to reach a full recovery. On the other hand, if you don't actually need the hedge and SPY continues higher, then you'll generate losses on the futures position that will more than offset the LT taxable gains on the SPY position. So yes, if you really don't want to sell the position to avoid taxable capital gains, then that strategy makes sense.