Well Hedged
I bought 3 SPYOF.X contracts on September 19 for 3.80. Today it was at 20.00. The change today was +6.15, or $1845. My portfolio today was up $300 (yes, that means my stocks were down about $1500). That’s pretty well hedged. I bring this up not only to brag (feeling pretty good about myself), but to stress the point that diversification is not the same thing as hedging. My stocks, mostly ETFs, are well diversified, but they were almost all down today (I have some GLD, which was obviously up). I don’t have to sell all my stock in a panic in down markets because I can be well hedged. This lets me focus on individual trades. Of course, had there been a big rally, I wouldn’t have profited at all. In a bear market, that’s the cost of insurance.
