28 Comments

Thank you Gregory. You are teaching me so much!

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Damn, already blew my account up on XLE calls, nothing left to hedge with.

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don't worry, with long expiries, you always have a chance👍

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Yeah if it turns around a bit I'll probably just sell it for a small loss and do something else. Tired of tying up capital in this lousy trade.

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my apprehension in buying a put right now is it moving sideways - already hitting a low (we should have bought a put at the same time as call i think) and then losing out on both trades.

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I got out as soon as it popped for a little bit and broke even no profit and no loss...

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i don't have enough anymore to hedge...all tied up in red calls. the best i could do is one that is expiring in two weeks and that seems risky to me on top of red already...thoughts?

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GM's best advice - always keep some powder dry

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Greg, is the hedging position based on our original acquisition value or current market value of our positions?

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I have the same question. Thank you!

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when you buy a PUT its based on the current market value, nothing to do with your original value of the CALL

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ty G

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Awesome Greg!!! Doing the same as well!!!

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How do I know my call position is at how much? can anyone help?

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If you understand you there are price in the middle of the options chain. It will have that price. You click it on the buy side which is green then purchase. Hope this helps.

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If I understand you.

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i wonder if buying a put after it has already done poorly/dipped right now is just throwing more money away? it may have hit the dip and now goes sideways never hitting either the put or the call strike prices and you are now even more in the red. it would seem to me to have bought the put at the same time as the call...but I'm not very experienced, but just my gut feeling on this.

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My DAL call option is a total of $655, so it's 10% is $65.5.

If I buy a DAL Oct. 16 $25 puts as Greg did, it will cost $310. so it will cost more than 10% ($65.5).

I am confused about how to tackle this challenge. Any help?

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My DAL call option is a total of $655, so it's 1% is $65.5.

If I buy a DAL Oct. 16 $25 puts as Greg did, it will cost $310. so it will cost more than 1% ($65.5).

I am confused about how to tackle this challenge. Any help?

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I think you mean 10%

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Yes I meant 10%

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Dumb question: How do you choose which holdings to hedge? The worst performers or are there other factors?

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👍🏻

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Hey, was that in answer to my question? if your CALL position is 10k premium, you buy a PUT with 1k premium? thanks!

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Am I right? so if your CALL position is 10k premium, you buy a PUT with 1k premium?

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Sorry Greg I do not understand this type of hedge and how to play it accordingly? It will be great if some of our Lions explain in practice how does it work? Thanks

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Investopedia is a good source for learning; it's difficult to explain technicality, and you might get even more confused.

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