Puts and Calls for DUmmies - David Jaffee #5597
Summary: Wondering how to deal with volatility and protect your gains defensively? David Jaffee comes on the show to discuss some strategies for trading based on how the market is progressing. He suggests that people hedge and take the opposite side, and also recommends buying elongated put options. This, in addition to taking the contrarian standpoint when investing, can help to reduce your portfolio volatility. Tune in for more insight. Highlights: -How do you deal with volatility? Should you put everything into cash or look for alternative strategies? -What is a poor investor to do, and how do you protect your gains from the last few decades defensively? -People need to make sure that they hedge and take the opposite side -It\u2019s wise to end up buying puts -You can buy elongated put options that are two years in duration, which will reduce your portfolio volatility -It\u2019s good to be a contrarian. When everyone is scared, it could be a good time to buy shares -Similarly, when the stock market goes up and people are euphoric, disciplined investors are buying protection because the market goes down a lot faster than it goes up -As long as you don\u2019t trade too big, you\u2019re safe -When the market is oversold, it\u2019s better to buy elongated call options -In this moment, the risk-reward is favorable for buying elongated call options Useful Links: Financial Survival Network Best Stock Strategy