Portfolio Protection, Revisited

Posted on November 11, 2011 - 11:25am

ryanbrennan's blog

By Lawrence G. McMillan

We have written about the subject of protecting a portfolio of stocks with derivatives several times over the years, although it’s been a while (Volume 19, Numbers 6 and 12 had articles on the subject). Recently, some subscribers have inquired about how to calculate the amount of protection they need. One facet of this calculation that seems to need some clarification is the work that one must do in order to convert his own portfolio net asset value into a net asset value that corresponds to a particular index within which one is considering buying protection. So, in this article, we’ll go over an example of how to do these calculations for a sample portfolio...

Read the entire Portfolio Protection, Revisited article (published on 11/11/11) by subscribing to The Option Strategist Newsletter.

ryanbrennan's blog

Past performance is not necessarily indicative of future results.
Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts.
Visit the Disclosure & Policies page for full website disclosures.