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| How to hedge against market downturns | Views: 563 |
| Aug 14, 2007 11:56 am | | How to hedge against market downturns | # |
Michael Fackerell | | A lot of pundits are saying that there will be more trouble in the realm of financial stocks. I heard Marc Faber on Bloomberg saying something like 40% of the income of the S&P stocks relates to the finance industry.
If this is true, then its wise to hedge against losses in this area.
I have an in the money put option on the DOW and a fair bit in a ultra short fund called SKF. They're both up today and they hedge my gold and silver stock portfolio well.
Private Reply to Michael Fackerell |
| Aug 14, 2007 12:50 pm | | re: How to hedge against market downturns | # |
Adrian Scott | | Interesting thoughts, Michael, thanks for sharing them.
A risk management plan is essential for all investors (and we are all investors implicitly even folks who don't trade the liquid markets), and defining the exit scenarios before going into a trade is helpful and a sign of discipline.
Setting stops when entering a trade, using various methodologies, is one of the best ways to go. (Folks who use a value investing approach have a different approach to risk mgmt.)
Good stuff, thanks,
Private Reply to Adrian Scott |
| Sep 21, 2007 5:25 pm | | re: How to hedge against market downturns | # |
Terry Osborn | | Greetings Everyone,
I'm relatively new to the group, but have been around Ryze for a while now. I look forward to reading more posts like this.
Michael, I was just curious about your options buying techniques, what month option did you purchase and what strike price?
Regards,
Terry Osborn
Citigroup/Smith Barney - Financial Advisor
http://fa.smithbarney.com/osborn
"Creating financial road maps today, to deal with tomorrow's financial barriers"
Private Reply to Terry Osborn |
| Nov 19, 2008 4:24 am | | re: re: How to hedge against market downturns | # |
Anne Fonda | | Hello Everybody
I prefer to see binomial tree pricing model Option technique. I prefer April option and strike price are those things which is not constant it varies most of time
Private Reply to Anne Fonda |
| Nov 19, 2008 11:31 pm | | re: re: re: How to hedge against market downturns | # |
Adrian Scott | | binomial tree pricing models are interesting, yes
Private Reply to Adrian Scott |
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