Protecting portfolio with put options and bankruptcy


Protecting portfolio with put options and bankruptcy


The assets that you have worked long and hard to accumulate can be lost within a very short period if they are not properly protected and you are sued, you file for bankruptcy or you are otherwise subject to judgments proceedings. However, understanding that certain assets should be protected from being lost in such circumstances, lawmakers have passed acts under which certain types of assets are, or can be, shielded.

As we have looked through research from the firms that we cover on Wall Street, we find that almost everybody expects a pullback. Some see one that is more significant than others. None that we have seen could be Index put options are often used to insure a portfolio against adverse market movements. ImplementationTo insure a portfolio with index puts, we need to first select an index with a high correlation to the portfolio we wish to protect.

At the same time, many of those who consider themselves to be in this category may find the approach I describe here protecting portfolio with put options and bankruptcy be contrary to investment strategy. Please bear with me as I believe it will make more sense once it is better understood.I should point out that I am not predicting an imminent market crash. I suspect that there will be a correction in the short term (which we are experiencing now) of between ten and 15 percent and then another leg higher.

If it lasts six months longer it will be longer than all but three bull markets during that time, out of a total of 15.




And options bankruptcy portfolio with protecting put

Protecting portfolio with put options and bankruptcy


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