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On some further analysis, a partially hedged position has a better reward/risk ratio – especially in bear market sector configurations:



I am cancelling my order to cover the XLK short and to buy XLF.

Right now the model has been fully hedged, but in bear market configurations a half hedge is sufficient: approximately 50% of the long positions.

It’s not EXACTLY 50%, but I’m not going to do the math this morning.

I am still planning to exchange PDLI for FCX, as long as they don’t gap away from each other.