Thoughtful Money with Adam Taggart

Common Ways To Protect Your Portfolio Using Option Hedges | New Harbor Financial

11 snips
Jul 2, 2024
Learn from New Harbor Financial experts about hedging using options to protect portfolios from market risks. Explore basic concepts, option trading with Apple stock, pricing factors, and strategies like protective puts and costless collars. Discover how options can offer both upside potential and downside protection for investors.
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ADVICE

Begin Options Hedging Basics

  • Start hedging with the most basic options strategies like covered calls and protective puts.
  • Always gain experience under a professional advisor before trading options on your own.
INSIGHT

Option Pricing Explained

  • Option prices reflect the market's calculated probability of finishing in the money.
  • Volatility and time to expiration greatly influence option premiums.
ANECDOTE

S&P Put Options as Insurance

  • For a $100,000 portfolio, buying put options on the S&P 500 acts like insurance against major market drops.
  • This protective put strategy provides a floor below which portfolio losses are limited.
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