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USING WEEKLY PUT OPTIONS TO PROTECT RUT TRADES

Discussion in 'Options' started by Rod M, Feb 20, 2015.

  1. Rod M

    Rod M Well-Known Member

    I have begun to hedge my RUT positions by using weekly OTM put options...about 4 deltas in value. I buy them about two weeks out and then just let them expire. On paper, using OV, this looks like a good strategy and allows me to define how much risk I want to take on. I dont include these puts in any of my greek calculations. except to determine how much to buy.

    On Paper...ie in OV....this looks like a good strategy and costs me about 10 percent of the overall profits of the trade. I am just wondering if anyone else is doing this and what your comments are.
     
  2. Andrei

    Andrei Well-Known Member

    What type of RUT trades are you putting on? Is it straight calls? I do not see how it would work with delta neutral trades but may be it is possible. Would be interested to know more details.
     

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