Equity Hedging - A Simple Overlay System

Discussion in 'Risk Management' started by OddTrader, Dec 31, 2011.

  1. Thanks Nitro.

    According to my system, this current trade should have been entered with 134 strike puts at a cheaper preminum, instead of the 135 strike puts for the already opened position right now.
     
    #31     Feb 13, 2012
  2. Hold for this week.
     
    #32     Feb 21, 2012
  3. Reduced from Long 2 to Long 1 Put; and Opened Long 1 Call below:


    Opened ET B/S # Symbol Price Closed Current Price P/L

    2/27/12 9:43 BUY 1 SPY1217C136 SPY Mar12 136 call 1.66 0 1.66 ($1)

    2/13/12 10:28 BUY 2 SPY1217O135 SPY Mar12 135 put 2.91 1 1.74 ($239)
     
    #33     Feb 27, 2012
  4. Closed the Long Call below:

    2/27/12 9:43 BUY 1 SPY1217C136 SPY Mar12 136 call (exp 03/17/2012) 1.66 3/5
    10:01 1.86 Low $18

    Keep the Long Put for another week.
     
    #34     Mar 5, 2012
  5. Finally, due to this system is a hedging strategy, I think it would be much better and logical to use only put options of variously sized position in order to attain the desired functional performence.

    It would be reasonable that the strategy now can hedge the market risk better during down trends when buying more puts.
     
    #35     Mar 7, 2012