Go to http://ExpertOptionTrading.com/videos for more free videos on Options Greeks That's how hedge fund managers do it. It's really a smarter way to manage a portfolio of stocks, by beta-weighting them - using the Analysis tab - against an index like the QQQs. Then, determining the number of puts that you want to buy on the QQQs in order to hedge your position. Now, I picked the 48s. The strike price is just about at the money here, but you can also go deeper in the money, if you wanted a little bit more protection. Of course, it is going to cost you a little bit more, so if you wanted a little bit more protection, you could go up to the 50s. That will give you a little bit more protection. Or you could use the 49s. It's really up to you, how much protection you actually want. If you want to get totally Delta-neutral, all you have to do is play around with the strike prices. You get down to 15 or 20 Deltas, you're pretty close to Delta-neutral here. My suggestion is to be a little bit long Delta, maybe 15 or 20, rather than short Delta. You want the stocks to move up. That's why you bought them in the first place. You can play around with the strike prices and the number of contracts any way that you want, in order to determine the amount of risk that you have. The longer the Delta, the less risk you'll have on the downside. But that is totally up to you. Whatever is acceptable to you. That's how I manage a portfolio of stocks using the indexes. I think it's a smarter way to trade. Also, this is the way to build real wealth, especially if we're in a bull market on stocks. At this time, it's questionable, whether or not we're going to have a bull market in the stocks. The market is actually going down quite a bit. If we take a look at the quick chart - I don't want to time this, but we've come down pretty heavily, over the last 6 to 8 months. It's questionable, whether or not we're in a bull market. This type of strategy can be used at any time. It can be used when the market is up, to prevent yourself from a downside draft that could wipe out a lot of the profit that you might have in a stock. If you already have a portfolio of stocks, and you're not hedging those stocks with put options, or if you're not hedging a portfolio that you might have, I think that's a mistake. You could wipe out a good deal of any profits that you may have on that. Also, you're losing an opportunity to purchase insurance on your portfolio, and then cashing that in later, if we do have a big down draft in the market, losing a lot of the Dow gains, or the S&P 500, or the NASDAQ. This is a very smart way to trade. For more Options Greeks videos be sure to check out our channel: http://www.youtube.com/user/howtotradeoptions To learn more about the Expert Option Trading course go to: http://ExpertOptionTrading.com Additional Tags ================ vertical spreads, options greeks, what is options trading, option volatility, option spreads, options volatility, how to trade in options, option strategies, index options, equity options, virtual trading, options spreads, virtual options trading, options trading tutorial, option trading strategy, options trading course, how to trade stock options, options trading systems, options training, learning options, learn to trade options, option trading tutorial, options trading strategy, option trading course, option trading systems, options trading basics, option trading basics, option trading system, options trading courses, options trading training, trade options, what is a stock option, options strategies
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