Account protection: Using Dynamic Hedging to Protect Short Puts

Worried about a crash and having your short puts lose money? Learn this simple and effective technique to reduce downside risk and increase potential profits. Dynamic hedging makes money if the market moves in either direction and can significantly reduce risks in the even of a market crash. In IBRK I show how to reduce risk on a position by short selling shares and simultaneously buying a call while holding a short put. I'll break it down step by step.

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0:00 Intro
0:42 My CVX (Chevron) short put needs protection
2:15 Details of the Trade: Short stock, Long call
2:31 How much does it cost to protect?
4:07 Entering the trade in Interactive Brokers IBKR
5:20 How it changes the risk profile

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My primary investment strategy is long term high yield dividend investing, index funds and reducing risk and exposure using options. I have been actively trading the stock market for over 25 years and have built most of my wealth by reinvesting my dividends and following my 14 Personal Rules of investing. I actively trade options on both the American and Canadian Stock exchanges using options strategies and buying and holding high yield dividend paying stocks.

I generate monthly income in two ways. Averaging more than an annual 7% return by collecting dividends on high yield dividend stocks that I hold. The second income stream comes from the selling of option premium and taking advantage of theta decay. I love trading strangles, Iron condors and diagonal spread for maximizing returns. Delta neutral strategies allows me to make money in both bull and bear markets and limits my risk. Both of these strategies are suitable for passive income and create a stable predictable safe passive monthly income.

Let’s Get Rich Together
Levi Woods

Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. I receive a small commission from the purchase of any item from using the links listed above. There are financial risks involved in taking on any monetary transaction that I discuss in my videos.

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[petriq]

Man this is no dynamic hedging at all. You had just done two 2 trades. 😂😂😂