I’ve already actually shot this video, and unfortunately, we had a video crash so I had to record it, so here what I want to do is, right around 3 o’clock in the afternoon, March 17th, 2016, I’m going to go ahead and re-film this video and give you some insight.
Some of these positions that we’ll be talking about are actually just some of the things that I’ve actually just done. So here we are in a simulated trading panel and platform, with fake money, not real money that I’m going to share some insight with you about hedging, and understanding how to hedge, what is hedging, why you may want to hedge and so forth.
Let’s get started
To get the discussion started, let’s go ahead and first look at a general portfolio. And if we were to do that, let’s go ahead and purchase some shares, again, fake shares, fake money.
We’ll go ahead and purchase some shares, let’s say 100 shares of Caterpillar right here, so we went ahead, we got filled in that, and we’ll go ahead and get some shares of Wal-Mart. We’ll go ahead and get 100 shares of Wal-Mart as well.
We’re filled in both of those, and now you can see we have 100 shares of caterpillar, 100 shares of Wal-Mart, and we’re actually already up to $10, which, things move pretty quickly in the market. But if you look at this overall, as a portfolio beta waited, and I’ll go ahead and just hide the simulations.
You can see that right here on a portfolio beta waited, you can see that right here, as these stocks move up, this is my portfolio.
This typically is used a lot in option trading portfolio. And with option trading, there’s a lot of time expiration, which I’ve done here in episode 75, but my goal for you here to discuss some hedging is really to see how far advanced we can get in these lessons.
Learn how to manage your portfolio
With hedging, it’s all about learning how to manage your portfolio. This profit and loss graph that we’re looking at right here, this is just a picture that shows your positions.
And if you start understanding these positions and know what is happening to your portfolio, you’re able to better make changes and adjustments when a black swan event happens. When something unexpected happens, or if you expect the market to sell-off.
#hedgingportfolio #portfoliorisk #tradingrisk #troubledstocks #hedging #stocktrading
Posted at: https://tradersfly.com/blog/ep-76-hedging-a-portfolio-in-trouble/
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