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Hedging Strategies – Balancing Your Stock or Options Portfolio - Show #055 - Option Alpha Podcast

3,972 views · Published 16 September 2016 · 27:51 · Indexed 9 October 2026

Channel: Option Alpha · 2016 · Howto & Style

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http://optionalpha.com/show55 - Market neutral, delta neutral, or balanced portfolio; call it what you want but the concept of making money regardless of where the stock market goes has been a long-time goal for many traders. But what happens when your portfolio becomes unbalanced? What are the best hedging strategies you can use to get back to a neutral stance?

In today’s show, I'll walk through three different portfolio scenarios and offer my advice on the best hedging strategies to use to help re-balance your positions. You'll hear which options strategies to use if you're too bullish, too bearish or completely lopsided. Plus, I'll help you learn how to hedge stocks that don't have tradable option contracts.

Of course, it all starts with a solid understanding of how to determine what your portfolio looks like on either a beta-weighted or delta-weighted basis. It's enough anymore to just have a couple of bearish trades and a couple of bullish trades. You have to determine what the net impact of each position is in the overall portfolio. If you can do that, you'll be well on your way to consistently generating income with options regardless of the market direction.

And as always, if you've got questions on portfolio management or hedging trades, add them in the comments section below, and I'll make sure to reply personally to every single one.

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