written by reader Hedging Strategy and Call options for growth stocks

By mkbijjala, August 15, 2020

All,
I’m relatively new to investing, I would like to get input from seasoned investors on the best strategy for leveraging options in investing. I know Travis doesn’t discuss options positions in detail in his posts but I’d really appreciate if anyone can shed some light, or please point me to any articles that will help me understand better.

Specifically, I would like input on how to leverage
1) when you take an option position (calls or puts) on specific stock, what’s your approach for expiry and strike price that you choose. Specifically, on growth stocks (SHOP, FSLY, TDOC etc).. do you look out for 18 to 24 months and target strike price 50% above current price or other strategies..
2) when you hedge your portfolio with SPY or Russell puts, what is your strategy (number of contracts, expiry and strike price etc..). I understand it is important to hedge to protect portfolio from sharp sell offs, wanted to learn strategies that seasoned investors use. In different online articles, I also read about leveraging VIX calls, so unsure which is the best option.

Thank you so much looking into my question. Understanding your approach would really help me.

Thanks,
Satheesh

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