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Strategies & Market Trends : Value Investing
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To: Mattyice who wrote (55450)6/12/2015 9:26:15 PM
From: E_K_S1 Recommendation

Recommended By
Mattyice

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An interesting hedging strategy buying long term out of the money Puts targeted to selected over valued securities. That's one of the better strategies rather than using a short ETF and/or just going to cash because of a eventual market crash.

I know that this thread does not like to use options when looking at the value proposition but buying long out of the money Puts is a better approach than out right shorting an overvalued security. You limit your capital risk/loss.

The value (or over valued) proposition can be done buying out of the money Puts if/when the risk/reward becomes a profitable investment hedge. I have not studied this but have seen enough overvalued stocks on my watch list that maybe some of my cash can/should be deployed using a long term Put hedge strategy.

If you discover other candidate Put buys that you feel are in the over valued price area, please post. Those candidate stocks that have large leverage positions are ones that I like as well as other future catalysts for future price destruction.

You can make money in both an up and down market. We know that the Fed will begin to normalize rates and that will hurt some stocks more than others.

EKS

P.S. Disregard this post and the investment strategy if you do not buy/sell options as an investment option.
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