STRATEGY EXPLAINER · 2:50
Portfolio Hedging using Index Options Strategy Explainer Video
An alternative to selling index futures to hedge a portfolio is to sell index calls while simultaneously buying an equal number of index puts. Doing so will lock in the value of the portfolio to guard against any adverse market movements. This strategy is also known as a protective index Collar.
The calculator models a protective put payoff. Read the guide for index hedge sizing and portfolio considerations.
