Our most recent S&P 500 (SPX) hedges — the SPX Mar Monthly (3/19) 3100 Put and the SPX Mar Monthly (3/19) 3100/3050 Put Spread — are on track to expire worthless tomorrow, so I am recommending new defensive positions today.
We will continue to track them as ongoing positions, but you can initiate one of these hedges even if you were not in a previous one.
Be aware that these are meant to be purely defensive positions. The goal is for them to expire worthless. They will only result in a profit if the market sells off sharply.
However, I plan to more actively manage our hedges going forward, meaning we may roll positions that have residual value.
If you are new to this kind of hedging, please check out my Coaching Session on Hedging Your Portfolio before making the trade.
Note that I am recommending the more liquid April monthly series as opposed to the April week three series, which expire on the same date. Call your broker if you need help getting into the right option.
Current Index Price: 3,958.69
Net Debit: $15.15
Action: Buy to open the SPX Apr Monthly (4/16) 3350 Put for around $5.05
New Net Debit: $20.20
SPX Bear Put Spread
Cash in Hand: $3.90
- Buy to open the SPX Apr Monthly (4/16) 3350 Put for around $5.05
- Sell to open the SPX Apr Monthly (4/16) 3250 Put for around $3.90
- Set initial debit limit at $1.15
New Cash in Hand: $2.75