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How to Hedge Your Stock Portfolio Using E-mini and Micro E-mini Futures and Options

Released on Tuesday, February 16, 2021FUTURES

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.

Carley Garner
DeCarley Trading, Senior Commodity Market Strategist and Broker

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