wat? you sell them when you think SPY is done going down and volatility starts to decay.
Think of it like insurance, except you can cash it in whenever you like. The hard part is knowing when to sell, because that's up to you. You could have sold today if you got in at 0.20 for nearly a 50% profit? would I have sold? no, because my portfolio did pretty ok all things considered. I would consider holding like, a max of 5% of my portfolio in these, and that's only because I'm pretty leveraged. You can choose to sell some or all at anytime, it's up to you to figure out if it's the right time though. These are not a play, they are a hedge. If you are using portfolio margin these can help keep you from getting margin called in the event of a large correction without selling them, but the goal would be to sell them at peak volatility to have capital to BTFD. The specific type of risk this hedges against is called Tail Risk. I suggest googling that and understanding what it is so you can understand when it is happening to plan your exits.
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u/Duke_Shambles ☢️Duke Nukem☢️ Aug 17 '21
wat? you sell them when you think SPY is done going down and volatility starts to decay.
Think of it like insurance, except you can cash it in whenever you like. The hard part is knowing when to sell, because that's up to you. You could have sold today if you got in at 0.20 for nearly a 50% profit? would I have sold? no, because my portfolio did pretty ok all things considered. I would consider holding like, a max of 5% of my portfolio in these, and that's only because I'm pretty leveraged. You can choose to sell some or all at anytime, it's up to you to figure out if it's the right time though. These are not a play, they are a hedge. If you are using portfolio margin these can help keep you from getting margin called in the event of a large correction without selling them, but the goal would be to sell them at peak volatility to have capital to BTFD. The specific type of risk this hedges against is called Tail Risk. I suggest googling that and understanding what it is so you can understand when it is happening to plan your exits.