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How to hedge against market downturnsViews: 1386
Aug 14, 2007 3:56 pmHow 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 4:50 pmre: 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 9:25 pmre: 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 9:24 amre: 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 20, 2008 4:31 amre: 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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