Hedging Explained - The Insurance of Investing

Great information!

This feels like the light side of the force, compared to WSB

the better option is to invest in dividend stocks to hedge crypto trading this consistently loses less than the crypto market in a bear market and makes more than stocks in a bull market I lose at least 50% less than crypto and I make at least 50% more than the stock market so I get alpha both ways the market could go and if I get margin I can be on both sides of the market instead of only going long that would make me even more money in a bear market instead of just losing less than the market but it increases risk by a lot

Excellent video, Richard!

In the Plan Bagel stock share example, you buy the share at $50 and hedge with the put option at $45 strike price. Why can't you just place a stop loss order at $45? What am I missing?

Great video series! I'm learning a lot. Wonderful explanations and examples. 😊

Great video sir!! @ThePlainBagel What is a good platform to buy stocks options and other investments? Thank you sir

How expensive are, say, puts compared to diversifying your portfolio, which is meant to do something similar?

Still kinda confused. Why would you short and long at the same time? Why not just have a smaller long position, wouldn’t that have the same effect

So, I should contact my ex whenever I see a potentiality of a breakup with my current partner. That's a great hedging!!

Would you consider diversification hedging? I consider it the insurance of investing as well.

Thanks! Very helpful overview.

So, basically, it's the science of breaking even?

Motivation for companies hedging is more so to protect them from the detrimental effect on profitability of significant price (cost) increases rather than capitalizing from gain on price decreases that improves profitability as at the least businesses want certainty in their cost and limit volatility to their topline.

I just got a ad of not investing to bitcoin

The Jupiter in retrograde - time to short nasdaq

Great video, Plain Bagel

best video about it. thank you and congrats

Almost as good as edging

GV

For individual long-term investors diversification is more important than hedging while achieving similar (though less dramatic) results. Have equities in multiple countries+regions, in a variety of industries, spread between large/med/sm companies. Mix in both growth and value strategies. This won't prevent you from losing money as well as a hedge, but it's also basically free and still effective at limiting large losses outside of global financial crises. If you plan on investing in individual stocks though this requires a lot more research since you'll have to learn about so many different areas.

I'd also like to note that it seems like most hedge funds don't actually do that much hedging. They're mostly just trading heavily in derivatives.

what's the cost of putting a seat belt tho 🤔

Excellent explanations (with visuals!) for contextualizing the material in CFA curriculum. Well done.

Make sure your intend stock have options available , Or buy Put Option first and then Buy your stock , just a poor opinion from small trader

Sir thankyou for helping me out. English is not my first language yet I have to do a presentation about hedging strategy whilst the book is hard to understand. You make it easier to catch up with my topic. Thankyou!

Great videos

"A poorly managed hedge can put you in a worse position"

That aged well.


























$gme go brrrrrrrr

Now I know that that 'insurance' called hedge. Great explanation, Sir!

Jed Clampett and the Beverly Hillbillies never had to worry about hedge funds.

😄👀

Who can blame people calling the stock market a casino when one of the tools, derivatives, is literally a bet. Even if it's stems from the need for hedging, it's impossible to have an equalizing hedging demand from both side so the gap in supply for one side will be fulfilled by demand that are not due from the need for hedging.
If there's no rules in place that the need for hedging is needed for a derivative to be created, it's entirely possible for a bet to appear with none of participants using it for the purposing of hedging.

the system is rigged. They HATE US CUX THEY ANUS. I m gonna ask my employer to payme in crypto

stupid hedge funds! if it is true! Why the market crash?

Maybe Citron should have watched this before shorting GME. Straight to the moon

This is my strategy, any feedback or constructive criticism is welcome:

80% of my portfolio is buy-and-hold in shares of established ETFs i.e. VOO and QQQ. 15% is in call options on more volatile ETFs that give high return i.e. ARKK. 5% is in puts to hedge the calls. If the stock continues to go up, the exponential profits from the calls will be substantial enough to make the cost of the put relatively small and worth it. If the stock drops, the profits from the put will mitigate much of the cost of the premium payed for the call. What happens to the 80% in shares is irrelevant, since I'm not touching that for the next few decades.

Thanks a lot! I am watching this for my CPA exams!

Keep posting interesting contents like this!

Additionnally, there's also Liability Hedging techniques that pension funds utilize to ensure future risk free returns.

I can't figure out if you use a green screen behind you or is it just a white-painted wall.

How can anyone dislike this? Sour grapes

Hey, could you make a in dept video/series on how to value companies/stocks. Like what factors or indications to look for and evaluate. Thank you

So can I hedge my 10 K bitcoing investment :)))))

This is the actuarial financial engineering exam in a short clip, minus ornhstein uhlenbeck, ito calculus and black Scholes etc. 😭

Make The Plain Bagel a mod of wsb

Bobby Axelrod nods in agreement

Stock down in value ,short increase in value ,Wht does tht mean?