SPY hedge

#RocketManHedge – Been thinking about this for awhile. Having a great year with account at all time highs. Don’t really want anything crazy to mess up a good year so I’ve been looking at some hedges out towards end of year. Looked at SPX, /ES, VIX, and SPY.

Finally decided on SPY with a synthetic short with defined risk to the upside and protection all the way to zero. It was then just a matter of how much insurance to get. I’m already hedged on a lot of my stuff but there is still some risk there if Rocket Man pulls anything crazy.

Here’s the details:

Sell to Open 2 SPY DEC 15 2017 253.0 Calls @ 4.28
Buy to Open 2 SPY DEC 15 2017 253.0 Puts @ 4.24

Then to cap upside risk:

Buy to Open SPY DEC 15 2017 254.0 Calls @ 3.65

Cost of trade $722 with max loss of $922
Max gain of $49,878 (protection to zero)

Breakeven of SPY 249.39

Questions, comments, criticisms always welcome!

#longputspread, #rocketman