That's what I am doing, covered calls (No naked). But in the case of a large diversified portfolio, selling covered calls on individual names might not be optimal (Unless you already have an engine for it to work out the different scenarios & more importantly the executions for you), this is why I mentioned, you have to work out the correct correlation and hedge ratio and short naked call options on indices or market ETFs to simplify the process.
What's your preferred instrument for hedging against stock market crash?
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That's what I am doing, covered calls (No naked). But in the case of a large diversified portfolio, selling covered calls on individual names might not be optimal (Unless you already have an engine for it to work out the different scenarios & more importantly the executions for you), this is why I mentioned, you have to work out the correct correlation and hedge ratio and short naked call options on indices or market ETFs to simplify the process.
$GME
Guns, Ammo, Whiskey, Cigarettes and Gold.
puts on tech stocks with negative PE. probably not a good place to be next week because I'm expecting a big relief rally due to the stimulus bill being passed.
Why don't you buy some puts with the option premium you get from selling the calls? that way you can hedge more downside risk.
Pure tail hedge purpose...long calls on leveraged inverse and Vol indexes pay like a motherfkr when the market drops hard. Last year SQQQ went from $80->$160 in less than a month. VIX $14->$80. UVXY $10->$130.
They stay in a constant downtrend and You will lose money 99.9% of the time on these though...must be willing to accept that unless your timing is impeccable you are throwing money away.
I have been kicking around the idea of simply just holding OTM puts on shit companies as a better alternative. If the market Drops they will undoubtedly print...if the market doesn't drop they could still pay off.
They stay in a constant downtrend and You will lose money 99.9% of the time on these though...must be willing to accept that unless your timing is impeccable you are throwing money away.
I have been kicking around the idea of simply just holding OTM puts on shit companies as a better alternative. If the market Drops they will undoubtedly print...if the market doesn't drop they could still pay off.
It depends. Overall I find the margins required on futures makes them a bit cost-prohibitive comparing to buying options.
Live cattle is cheap margins. Don't listen to the cows, do not eat more chikin! Red meat for teh win!
There is a third instrument called cash. And much more efficient that puts or futures.