/biz/ - Business & Finance

>>23660261
i dont get what part of insurance you dont understand, no one is trying to outsmart anyone
options were created in the first place as a way to hedge
you're not putting all your money into puts, you're only buying enough to hedge your position

think about it if you wanted to dump $500K into the market at once, do you want to get fucked by timing or some uncertainty in the market (e.g. US-China geopolitics risk) because you bought in the wrong week? Or are you going to buy like $25K in long-dated puts to hedge your position so your losses will be capped during that period?

Keep in mind that the premiums on these puts are expensive in the first place precisely because the market is incredibly volatile as shit, that even large companies can go down 10 to 20% overnight
SPY puts to Jan 2021 are "expensive" nowadays because it's unthinkable in calmer times that SPY could even dip 10% within a couple weeks

if you're a small player with only like 5 figures or even 6 figures, then yeah you probably don't have to worry about hedging and just use stop losses. Bigger players cannot do this because they CANNOT unload instantly without causing a flash crash or something

>>23597884
it's too late now but consider buying puts next time to hedge your position
unless you're talking about positions with IV over 100 then it might not be worth it over just trimming

>>23584832
well it's too fucking late now but i sure wish i had bought puts to hedge my position

Premiums were like $1/share and I was what's the worse that could happen, volumes already calmed down, potentially good news coming up soon with MSFT and SNE, etc
boy does hindsight hurt a lot