How to hedge SPY?

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1] MAINLY study trends/study them a lot......................................................................
2]F0R sure a bigger downmoVe JUL 4th week in SPY \but the main surprise to me it did not happen weeks earlier.
3]QQQ tends to sell off with SPY but doesnt have to it/ it did not JULy 4th.
4]SDS seems to work better for me ,some profits than spxs or spxu, for swing trading; SSO, SPXL,UPRO help better than sds,spxs,spxu// in different time buys.
5]Monthly charts work well in a SPY/QQQ bull market; maybe not so much in MAR\SEPT
6-7] Repeating patterns, monthly charts work well usually in a SPY QQQ bull/market/ sure did JUL4th week. I did not include comissions but did include dividends /when i get them

 

I recommend reading this:
Does the Capital Asset Pricing Model Work? (hbr.org)

 

unless your account is many millions, it doesn't make sense to hedge. But if you want to spy options

 

5% return over 11 years? Am I reading that right because that sucks if I read that correctly..

 

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That study concluded most are not diversified enough.
T Bills = risk free, could be\ before S& P downgraded US/LOL??

 

The basic idea is that stock prices are driven primarily by the market factor (e.g. beta to SPX), with the rest being distributed across industry, factor, and idiosyncratic risks.

 

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Another Elite Trader noted he used a stop loss to hedge.
BUY SPY every month or quarter for 40 years tends to work well. One DEC looked like they may sell it hard + they did not ; SPY + UPRO worked well/spy drawdowns much less than UPRO..........

 

Well that's the difference between a hedge and an exit. You hedge when you want to get a cleaner exposure on a trade. You exit when the risk/loss is too great.

 

See SPXS

 

The day SPY fell 8 points on open from DIDI takedown? Made 1000% on SPY 430P for my COIN calls. Never imagined for a second it would bank. But I was thinking an unlikely otm put on SPY was better than no hedge. I get screwed way too many times from holding options overnight.