hedge with SPY puts, use credit spreads to help pay

Discussion in 'Options' started by traderlux, Feb 9, 2016.

  1. newwurldmn

    newwurldmn

    Sell a call for a risk reversal.

    If you are going to hedge by buying puts then you are saying you think deep downside risk exists. Don't sell deep downside options to finance the hedge. If you are right about your hedge then your financing trade will seriously undermine your needed hedge.
     
    #11     Feb 10, 2016
  2. The problem is a hedge limits your risk and costs money, you cannot put on a hedge and then offset its cost other than simply taking it off. Hedge = insurance = cost, you either pay for the partial protection or don't.
     
    #12     Feb 10, 2016
  3. any new ideas on hedges?
     
    #13     Aug 13, 2017
  4. If that were done immediately about the same time, that would be a brilliant idea!

    I never thought about that before.
     
    #14     Aug 13, 2017