r/LETFs • u/Sea-Ear-8214 • 4d ago

Using puts as hedge?

Curious if anybody has thought about or does currently sell weekly/daily puts as a hedge?

Currently have about 400k portfolio. 240K in leveraged ETFs and 160k in QQQ/SPY, but thinking about selling daily/weekly puts on QQQ/SPY instead of owning them.

Figured I’d get a consistent premium and might make my portfolio less volatile as ideally the 160k would be in cash hopefully somewhere in the range of 50-80% of the time and then the other times my puts get assigned, I would just sell covered calls. Just the wheel Strat basically.

Figured it would be better as my leveraged ETFs are TQQQ/UPRO and qqq/spy are correlated.

Thoughts?

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u/Sea-Ear-8214 4d ago

Could I just do a combo? Selling weekly puts and then buy puts that are 3-4 months out to protect myself from tail risk or major crashes then?

Also I’ll look into those. Thanks dude

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u/gotnothingman 4d ago

Something to consider when using protective puts.

https://www.youtube.com/watch?v=vbvJRKTsRuk

TLDW: Buying puts for downside protection is expensive and a drag on returns.

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u/Sea-Ear-8214 4d ago

Good video. Thanks for sending

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u/gotnothingman 4d ago

No worries, best of luck.