Cloud said:
FJ43 said:
I added some SPY March 350 Puts here. Feeling a bit uneasy.
how do you size this? % of total equity?
There are guys on here much better at hedging than I am so this is just what I am doing. Probably one of my weaknesses and something I need to get a lot stronger with in both knowledge and execution. .
Short term - I buy SPY puts with no more than 3% of profits of the week. While these may be sacrificial I will 'trade' them out if decaying or roll them out. I buy these when we hit tops or highs.
Mid Term - I buy SPY puts out 6-8 weeks. Same when riding tops. Today was March 31st 350 as example. These I will use same almost as position sizing. 1-2% of account value loss ratio When they are at a point I will sell or roll. I have also used Options on SPXS.
Long Term - I have some shares of SPXU (a 30k favorite) that to a degree I just have and 'forget'. Was using UVXY as well for shares but I think Mostly Foggy is the expert on these. They should probably be traded vs set and forget them.
Weekly hedging is like insurance. I may pay the premium and not get anything for it. But be really happy if I need them.
Hope that helps and hope someone on here that is the Hedge Master chimes in so we can both learn.
Wealth gained hastily will dwindle. but whoever gathers little by little will increase it.
Proverbs 13:11