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When the shorts came home

As I played around with my hedge using SPY puts, the strategy was proving increasingly hard to sustain. The cost of trading options was increasingly nullifying the benefit of holding these options and being wrong or minimally right. I had my first discussion with friends regarding this option strategy was in late 2015 and as you can see, I have not had much luck up until now. My apprehension of this strategy comes not from the idea of the hedge but the cost of rolling these hedges up as and when you are proven wrong. Being wrong is part of the hedging game and so rolling up a hedge is the most integral part of the hedging game. By late 2017 I was getting a little tired of being wrong and not being able to effectively keep my positions open due to the cost of rolling up.

By end of 2017 my hedge was getting increasingly limited to VXX, TBF and GLD. ETFs that I can hold with built in fees but no transaction charges and an automatic roll up. But this was not ideal and more of a side hedge…

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