This could also help. Nice analysis from BoA: The Cheapest Hedges For A Systemic Collapse http://www.zerohedge.com/news/2016-...ow-here-are-cheapest-hedges-systemic-collapse
You can have such a downside protection even for free: Sell 1 ATM Call and Buy 1 ATM Put You can also have a similar upside 'protection' for free: Buy 1 ATM Call and Sell 1 ATM Put But, unfortunately you can't have both at the same time for free (Of course in your special case (1% == $1000) adjust the number of contracts accordingly by taking also the current spot value into the calculation...)
O GUru; I think you made a good point on that BAC article.LOL Having said that- thanks for the article But i assure you NONE[ no one with any sense] thinks BAC was the first to connect FED moves with market drops or market moves-uptrends.LOL-LOL One silver deal sold me a sort of silverbook... , used- it said'' 1987 silver''. Elites can most likely improve what i just noted, but i like mine better than BAC . I do like some of BAC ads[NOT a stock tip or prediction] One elite said'' selling is a good hedge-true'' most likely talking liquid markets - a market maker warned ''2, 0 0 0 stocks are hard to hedge.''Word to wise; amen.....
Last month I heard an old cliche'........'Sell in May and go away !' Based on all the news I heard this week about the finance icons suggesting a major drop is imminent, it sounds like good advice.
I have a sound belief based on my back testing that profitable trades occur quickly. Since long term system is so often wrong in futures positions, I need short term insurance, so I hedge and hedges are only kept for so many days. But for hedging long term basis, this will be much more expensive if buying options close to current prices and keeping them till expiration, matter of fact, hedging could cost more than whatever you made if market doesn't drop quickly.