Trade Findings and Adjustments 3-03-2020
Here are the real facts & steps to take on black swan events!!!!!
COST – Wait and see if it tests a 316.33 support Pivot Point for a possible entry in a dip buying opportunity.
BIDU long term? Look at going further out in time Jan 2022 150 Leap Long Calls for more time.
BUT we also have open SPY, QQQ Bear Puts 03-April-20, 09-April-20, Monthly April 2020
These are the steps I took in 2008, 2000, 1996, 1993, 1987 in black swan, big dips in markets
Sometimes you get lucky and you already have protection on for earnings
1st Recognize the possibilities that you are or might currently be in a black swan event
Higher VIX, Lack of understanding market movements, bigger spreads, platforms that aren’t working like they are supposed to
2nd thing to do? – Take a profit even if it is a taxable event
3rd step Hedge the portfolio
Do you hedge prior in low volatility times? Depends on your needed gains in the market and your personal risk tolerance
I’ve chosen options = long puts or bearish spreads to hedge my positions
I buy insurance on stock, I buy spreads when the VIX gets over 30,
I DON’T make up every single penny on the way down and NEITHER does anyone else
The MORE you make up as positions go down the LESS they need to come back
LEAPS are going to be in trouble unless be have a big bounce before the end of the year and/or we dollar cost average
CAN it get even more volatile? For certain and when we do start having big up and down days with NO consistency then you go to 1-5 day straddle, strangle spread trades