How to Hedge your Portfolio Against Risk: Long Put Option Strategy Guide

Put Options can be used to hedge your portfolio against risk or even make an aggressively bearish trade with low risk and potentially high reward. This strategy only requires level 1 options approval and is a defined risk strategy.
If you are new to options, i have a whole introduction to options series including, definitions, real world examples, and the technical inner workings of these sometimes mysterious market assets.
Technical article on the math behind Greek Variables:
docs.fincad.co...
Please do me a favor and like this video and subscribe to my channel!
To enter the raffle for a $25 Amazon Gift Card, all you have to do join this community dedicated to equipping and empowering everyone for financial success and security! Follow the link and make your first post to enter: / 231650641611222
Follow me on Facebook:
/ investing-for-the-comm...
Theme music:
Fanfare for the Common Man
Composed by: Aaron Copland
Performed and Recorded by: Luke Baker
Footage Credit:
videvo
peacezxp

[@investingforthecommonman4533]

The past several weeks have been a perfect example of when buying a Put on the NASDAQ or QQQ would be a great way to hedge the risk of your positions in overbought tech like TSLA and AAPL!
Don't forget to hit that Like Button!

[@hornwizard363]

Oh boy, you're right about that! TSLA and AAPL have been painful for me recently!

[@investingforthecommonman4533]

@@hornwizard363 Sure right about that!

[@financewithparkes1401]

I learned more in this 8 minutes than I did a 2 hours college class on options and puts.. keep up the great work!

[@investingforthecommonman4533]

That's awesome! That's why this channel exists to equip investors and traders and help them learn the skills and concepts they need without wasting precious time.

[@thomastaylor7970]

Good and to the point.

[@martinputnam8281]

Fanfare for the common man. Nice touch. Good info conveyed efficiently. Love it.

[@investingforthecommonman4533]

Thanks! Unfortunately, most people don't get the reference. 🤣

[@PreppingWithSarge]

Really appreciate these instructions on how to play options my friend. The Long Put seems more up my alley

[@investingforthecommonman4533]

Thank you for the support. This is important strategy to have in your arsenal when things go wrong in the market.

[@DAVIDBIANCHI]

thanks for this I'ma new trader and this was valuable for short-term puts. I'm really overexposed right now.

[@investingforthecommonman4533]

Yeah, managing risk is one to the keys as a trader to staying in the game for the long haul.

[@thelongevityproject]

Awesome video! I just came across your channel and subscribed. Looking forward to more videos from you!

[@investingforthecommonman4533]

Great to have you and thank you for the support!

[@TradingWithCJ]

Great breakdown! Good to know! 👊🏼👊🏼

[@investingforthecommonman4533]

Thanks for the support!

[@live2thefullest617]

Very concise and easy to understand. Thanks.

[@investingforthecommonman4533]

Happy to help!

[@lvg8769]

Thank you for explaining the Greek

[@djkingshameek]

Thanks for breaking it down easily

[@thewongmindset451]

Great info. Always looking for ways to hedge with elections coming up and things back to peak levels. We’ll see 👍

[@investingforthecommonman4533]

You are certainly right, the market could always go either way, and it is important to hedge your bets against high risk events.

[@atlresale8097]

Awesome video and guide!

[@investingforthecommonman4533]

Thanks for watching!

[@princessleala]

Thank you

[@investingforthecommonman4533]

You are very welcome!

[@deathsoulger1]

Its like here are all these complex stratages, but you're probably better off to just automating buying S&P500.
Even if I learn all this stuff, I still bank on my own incompetence letting me down.
The only thing I want to learn is is there a tiny % of leverage that can increase your Sharpe ratio while still being like 99.999% your not going bust.

[@bbasian]

Why select a put with 1-3 weeks expiration? Instead of buying a 4 months put and close it with 3 months left?
Doesnt a put with 1-3weeks expiration has a fairly quick time decay??

[@investingforthecommonman4533]

You can certainly do that, the only downside is a Put contract with four months left to expiration is going to be very expensive, Which increases your potential max loss significantly. Selling it back with three months left is a good strategy to mitigate the cost, but if the stock moves up significantly in that time, your loss will be much more substantial.

[@bbasian]

@@investingforthecommonman4533 Seems that ATM option with same expiration period and same underlying still fluctuate a bit due to vega.
If implied volatility increase, vega will increase too. How do we determine if a ATM option is too expensive? How much Vega % in the option price is considered too high? Like, if a ATM option is $1 , and vega should not be higher than $X, otherwise the option can be expensive?

[@investingforthecommonman4533]

@@bbasian Yeah those are pretty tough questions to answer. In theory, yes a vega increase can increase your the value of your hedge. In practice I have often found vega to have much less of a noticeable impact and Delta (the constantly fluctuating stock price, ends up affecting the option price much more). There aren't really definable levels of vega to target, it is really going to depend on the specific security, market circumstances and your outlook on the underlying security.