Let’s Go Long – November 15, 2011

[nickola.pazderic]

Hi Rembert,

With the high violatility of late, I have found that hedging eases the pain of down days, hours, minutes. Call this a response to the human factor in robotic and discretionary trading or insurance.

I concluded from this experience that when the market demands it, I will trade against my core positions.

Please correct me if I'm wrong, but such thinking is at the heart of options trading. Covered calls, verticals, and complex delta neutral strategies are all hedged. Thus, individual traders hedge their positions with regularity.

Best,