The futures markets were created to enable farmers and ranchers to hedge their business activities. Further, stock index futures were created to offer portfolio managers an efficient means of hedging; yet most market participants are purely speculating. Join Carley Garner as she goes back to the basics by looking at the E-mini and Micro E-mini stock index futures vehicles for hedging rather than speculating. She will also discuss a portfolio hedge that involves very little out of pocket expense using a combination of long put options and short call options.Topics to be discussed include:
- What is a portfolio hedge and why it can be beneficial?
- When should a portfolio hedge be used?
- What are the various methods of hedging?
- What are the advantages and disadvantages of the various methods of hedging a stock portfolio?
- Pure hedge vs. partial hedge
- The opportunity costs of hedging your stock portfolio with futures and options on futures.
2020 brought unprecedented market volatility but, in turn, it also provided an incentive for the CME Group to offer options trading on its new suite of micro-sized stock index futures. Micro E-mini options open the door to fine-tune risk and reward prospects with proper position sizing and they also enable small traders to speculate with nearly any strategy while trading within their means. In short, account size is no longer a barrier of entry to the various options trading strategies and covered calls and puts which would require large margin requirements and the acceptance of significant risks when executed in the larger E-mini futures and options contracts.
Join Carley Garner to discuss:
- What are Micro E-mini options?
- Micro-sized futures and options on the CME trade 23-hours per day!
- How can Micro E-mini options be used to hedge futures positions?
- Constructing ultra-low-risk option strategies using Micro E-mini options.
- Option spread trading: butterflies, vertical spreads, and outright long and short options.
- Trading closer-to-the-money with less risk.
Higher Probability Commodity Trading: A Comprehensive Guide to Commodity Market Analysis, Strategy Development, and Risk Management Techniques Aimed a
A Trader's First Book on Commodities: Everything You Need to Know About Futures and Options Trading Before Placing a Trade
Trading Commodity Options...with Creativity: When, Why, and How to Develop Strategies to Improve the Odds in any Market Environment and Risk-Reward Pr