hello,
was wondering if anyone out there has any advice/thoughts regarding the use of "put options" as a means of providing insurance as a hedge to cover against potential large market corrections - or to minimize losses
(if and when there actually is a correction).
some of the approaches I've read on the topic suggest spending 1% of your total stock portfolio. In my case, stock related funds/individual stocks amounts to about $500k. I do have about $183k in bond funds and another $143k in money markets.
Since I want to stay consistent with my current portfolio mix, I don't want to sell off any stocks or funds. Was researching put options against the SPY (to keep things simple).
Obviously, I will try to ride out the usual ups and downs, but I'm concerned primarily about a bigger correction, say 10-20% that could potentially occur over the next year to year and a half.
Any thoughts on good strategies relative to put options (specifically SPY).
What's a good option length to buy (example 1 year contracts are more expensive, or do you buy shorter term contracts and just re-buy at 6 month intervals)
Thanks.
was wondering if anyone out there has any advice/thoughts regarding the use of "put options" as a means of providing insurance as a hedge to cover against potential large market corrections - or to minimize losses
(if and when there actually is a correction).
some of the approaches I've read on the topic suggest spending 1% of your total stock portfolio. In my case, stock related funds/individual stocks amounts to about $500k. I do have about $183k in bond funds and another $143k in money markets.
Since I want to stay consistent with my current portfolio mix, I don't want to sell off any stocks or funds. Was researching put options against the SPY (to keep things simple).
Obviously, I will try to ride out the usual ups and downs, but I'm concerned primarily about a bigger correction, say 10-20% that could potentially occur over the next year to year and a half.
Any thoughts on good strategies relative to put options (specifically SPY).
What's a good option length to buy (example 1 year contracts are more expensive, or do you buy shorter term contracts and just re-buy at 6 month intervals)
Thanks.