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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...

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