Any idea as to best way to hedge GE exposure? Don't want to use options because of time decay. Was thinking of buying some SDS. I know there is some tracking error but that occurs more over the long-term, correct? I especially want to hedge exposure over this weekend since GE just had a pop.
You can compare the tracking error to the theta decay over your intended time frame and make a determination on which is the least costly hedge. SDS also has 'time-decay' due to leverage. Without any analysis, my guess would be that an option would be a better hedge, that's just my 2 cents though. A more precise hedge could be a SSF (if they are available for GE, I'm assuming yes) or a synthetic option position to replicate an opposing GE position (but then why not just temporarily reduce exposure - same result).
The risk-reversal. Buy the 19P funded by the short 21C. Minimal decay. CC upside, downside free put. maybe ratio it 3/5 favoring calls to trade it at no outlay. Or go 18/21.