Yes, I've considered the %. Anything much higher than 0.5% is too much of a headwind. My returns get better without an additional hedge at that point. I'm looking at SPY put 200 strike from 0.24 to 14.45 (1/2/20 and 3/18/20 respectively). That type of price increase looks good for a hedge at only 0.5%. There are similar results for UVXY calls at strikes 90 and 100. These are for 6 month options.
Uvxy can be extremely impressive and can easily catapult insanely high with a just a tad bit of fear in the market. Impressive put on spy after the collapse. According to 99.9% of articles and people interviewed on cnbc and other financial networks there is literally zero chance of the markets every going back to March lows.
%% That could work well. Selling + selling every now + then can work well, like some today.Invese etfs, most of them pay a dividend, believe it or not. I got up set a bit because I missed a dividend earlier in the year; but was better off selling + buying it back with no or ,low conditions............................................................. We are over due for a summer corection selling some /making a profit realized, helps, in addition to un realized gains
Most of time, hedging a "buy and hold" portfolio will make things worse in the long term, especially with put options. Buying a short term put option when the sky is falling is way less damaging. You could use SPX instead of SPY, depending of your portfolio size : Less contracts = less commissions, and it is taxed as a 1256 contract in the US, instead of short term capital gains. You could also check https://www.portfoliovisualizer.com/backtest-asset-class-allocation to see what does gold or other assets exposures to a portfolio.
Thanks for that recommendation. I've used the website you suggested before. It's a great tool. I'm happy with my asset allocation. However, the Covid market seemed to make everything fall.
Usually it is not a wise idea to buy options on uvxy or svxy. As mentioned in the other threads you can hedge using futures / index options. i am not sure if there is any more room in gold.
What percent of spot are you willing to spend and would you consider selling upside to partially offset the protection? If so,what percent of spot call would you be good with selling.... Whats the apx beta on your portfilio?