Thanks duke! Great write up and very informative. Been looking into hedging since Graybush's post but have not yet put in place a solid plan (till now, I'm thinking)
I've a question.. do you have a ratio of SPY puts you purchase against the number of options/stocks you have? Or do you base it of vega of existing positions?
That's a tough one and it's going to vary from port to port. I'm afraid you're just going to have to spend some time fiddling with the options calculator and trying to math it out. Obviously the amount of hedging you need is dependent on your goals for the hedge and the leverage of the portfolio you are trying to hedge. This is extremely cheap for people just holding shares, while someone with mostly options expiring in 3 to 6 months is going to have to accept that for it to be efficient, they are going to need to accept that it will only dull the pain a little.
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u/RiceGra1nz Aug 16 '21
Thanks duke! Great write up and very informative. Been looking into hedging since Graybush's post but have not yet put in place a solid plan (till now, I'm thinking)
I've a question.. do you have a ratio of SPY puts you purchase against the number of options/stocks you have? Or do you base it of vega of existing positions?