Interesting. This sounds like a no-cost BSH (Black Swan Hedge) I have heard a little about. However, I don't have/know the details, but the cost and structure sounds similar. -- My recollection, is that it may be a little tricky to get the BSH fully entered (perhaps in stages, to insure the cost is near zero).
Here is the maybe not so great idea I am trying as a wake up hedge for a 5-6% down move. Market is not showing much inclination to go down so I am trying these to see what happens with gamma and delta. With circuit breakers and probable government action plus no large institution portfolio insurance, bear market will probably not be a 1987 style crash. Buy ratio ES future put spreads out about 1 month for a 1 point credit per spread. Long 1 ES futures Sep. 2160 put short 2 Sep 2110 puts. Break even is 2060 Sep. futures. This is butterfly without the long 2060 put wing. Idea is when ES starts losing at 2110 I wake up and buy wings for about 10 ES points each unless IV really spikes or sell futures. I am self insuring until weather gets bad. This approach has no cost for 5% down spikes where the market then immediately recovers that is the current pattern. Idea is the losses below 2110 will wake me up and force me to act. This trade can hedge $2500 of losses per spread at 2110.
Generally the cost less 1x2 doesn't earn in a selloff. What happens is you start to get short a lot of gamma and start accumulating a lot of theta But the value of the position doesn't change much. It is a pretty poor hedge prior to expiry. Don't get lulled by its siren song of low premium investment.