By Karim Rahemtulla Hedging is not always profitable because it’s a protective measure that allows you to balance your risk. We know markets rarely move up in a straight line. But when they do, the risk of a major downside correction increases dramatically.
So you should be somewhat prepared. Using simple hedging techniques will help you to do just that…
Married Puts
This technique is an easy one. Simply buy out-of-the-money put options against shares of stocks that you own. A put option increases in value if the underlying stock decreases in value.
For example, if you have 2,000 shares of GM that you bought at $25, …read more
