Don't bother with put options, inverse ETFs or short positions in the futures market, just dump any stock that drops below its 200 day simple moving average (or even its 100), simple as that. This simple, almost stupid rule can prevent ANY stock market crash from damaging your portfolio. Plus you can always re-enter later, if the uptrend resumes. Put these moving averages on the chart and see for yourself...
True, but pressure is building everyday. Companies increasing rapidly in market cap while many at record low profits. EPS is at its lowest since 2008. Shows that investor are looking for capital growth and dividend a distant second. All I'd say is keep an eye out. I cashed out of my etf a week ago, too soon it appears. I recently shorted it and down $1500 atm so double hit .Called it wrong so far. I'm waiting for some moderate pullback or market to get spooked to reduce losses
this is a high tax sttategy depending on how long u hold the stock before selling? just short a similar companybin the same industry or a competitor. thats what i do. then lift that short when ur comfortabkle not being hedged. pretty simple n guess what it works
Not if you hedge with spx options + spx is 10x the size of spy so your transaction cost come down by half
I agree. But I still think it is a good hedge in normal bear markets. What would you suggest as an alternative to gold? Hedging only with options/fututres?
Looking into some historical prices of the e-mini S&P500 futures contracts and did some quick hedging scenarios. It is a good way to hedge the downside, but the upside gets hit hard if the market goes up. I do like the option play a little better since the prices can grow exponentially which is the type of growth I would need for this hedge to make since. Or am I still missing something when hedging with futures?