3min chapter

Forward Guidance cover image

Options Trading for Macro Investors | Imran Lakha

Forward Guidance

CHAPTER

The Risk of Buying a Put Spread

The longer dated, the more in the money put option. Your risk is that it bounces back. If you're going to buy a hedge, you want it to blow up and make multiples of what you spent on it. The ability to sell it out in the crash, monetize the protection, that's what the outright put gives you. That's what the put spread misses out on.

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