Author Topic: How do you protect your $$  (Read 2573 times)

Wordstew

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How do you protect your $$
« on: April 04, 2016, 10:03:00 AM »
Just curious if anyone here is actively buying market put options for downside protection. I would be curious to hear of any strategies people are using to protect their $$ after amassing a good sized portfolio.

GrowingTheGreen

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Re: How do you protect your $$
« Reply #1 on: April 04, 2016, 10:44:37 AM »
You'll probably find that this crowd mostly sticks to a boring stock/bond mix.

If you want to go down this route, start looking at hedge funds which ironically are losing interest due to poor performance.

arebelspy

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How do you protect your $$
« Reply #2 on: April 04, 2016, 03:02:01 PM »
You'll probably find that this crowd mostly sticks to a boring stock/bond mix.

If you want to go down this route, start looking at hedge funds which ironically are losing interest due to poor performance.

I am so confused by this post. :)

Why is that boring?

Why should one look to hedge funds for downside protection?

Why is it ironic people are losing interest in Hedge Funds because their performance is bad (e.g. Buffett's bet)?

On topic: yes.
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forummm

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Re: How do you protect your $$
« Reply #3 on: April 04, 2016, 05:13:48 PM »
On topic: yes.

Wait, you buy puts? I find that surprising. What's your strategy?

ScarElbow

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Re: How do you protect your $$
« Reply #4 on: April 04, 2016, 06:27:06 PM »
I mostly sell puts to collect premiums and buy the underlying at a lower price if I believe in its long-term up trajectory. But im getting rid of owning underlyings altogether as they tie up too much capital AND be right on my bullish assumption.  The only time I would buy naked put (or debit put spread) is near earnings when volatility is high and bound to contract days after. This is an assumption that bad news are coming and the underlying stock would experience a sudden sell off. But what about good news and the stock experiences heavy buying? You could straddle it by buying both put and call near the money hoping for an immediate movement up or down from the high volatility.

Oh to stay on topic, I protect my money by not owning anything.
« Last Edit: April 04, 2016, 06:31:46 PM by ScarElbow »

Wordstew

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Re: How do you protect your $$
« Reply #5 on: April 04, 2016, 06:54:35 PM »
I should rephrase my initial question somewhat.  I was just curios to see if anybody was utilizing any type of options strategy and benefiting from it.  Lock in your gains and buy calls or protect yourself from losses and buy puts.  I know it's an oversimplification of options but you get the jist

jim555

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Re: How do you protect your $$
« Reply #6 on: April 04, 2016, 07:00:56 PM »
Most long term holders don't care about the ups and downs so don't see a need for this kind of activity.

GrowingTheGreen

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Re: How do you protect your $$
« Reply #7 on: April 04, 2016, 07:48:24 PM »
You'll probably find that this crowd mostly sticks to a boring stock/bond mix.

If you want to go down this route, start looking at hedge funds which ironically are losing interest due to poor performance.

I am so confused by this post. :)

Why is that boring?

Why should one look to hedge funds for downside protection?

Why is it ironic people are losing interest in Hedge Funds because their performance is bad (e.g. Buffett's bet)?

On topic: yes.

Bogle himself said, "It is the most boring investment strategy ever invented in the history of time." :)

arebelspy

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Re: How do you protect your $$
« Reply #8 on: April 05, 2016, 02:43:36 AM »
On topic: yes.

Wait, you buy puts?

No, I do not buy puts.

Bogle himself said, "It is the most boring investment strategy ever invented in the history of time." :)

He was referring to index investing, which you didn't mention.  Also, most boring (in comparison to other types) does not mean "boring."  And you didn't explain the other stuff I was more confused about.  Oh well, no worries.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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Metric Mouse

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Re: How do you protect your $$
« Reply #9 on: April 05, 2016, 05:08:14 AM »
Just curious if anyone here is actively buying market put options for downside protection. I would be curious to hear of any strategies people are using to protect their $$ after amassing a good sized portfolio.

Yes.