In this video, I'm covering how you can hedge basically for free — you can't forget that there's always going to be some sort of risk and cost involved in trading.
I had this question come up a couple times in my live trading room recently so, as promised, I made a quick video on the easiest ways to do it.
Hedging is like a form of insurance that protects your portfolio from risk. By also buying the opposite position of the same stock, investors are able to protect themselves if the stock market turns against them.
One method I like to use to get a net debit/credit of zero is the bearish risk-reversal strategy.
And to show you how it's done in practice, I'm going to take a look at the SPY March 5 call options.
From there you'll be able to witness how I use the premium I gained off of this trade to finance my next. |
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