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Amateur traders often fall into the trap of buying out-of-the-money (OTM) puts to hedge their stock portfolios, hoping to profit from market corrections and downturns. This strategy is challenging not only because the underlying must trade down significantly for the OTM puts to become profitable, these options often expire worthless fighting the losing battle against time decay.In this feature presentation, Matt will show you how he uses butterfly spreads with index options to hedge his long stock positions. Using real examples, Matt will take you through all the steps and criteria, including strike prices and expiration months, that he uses to construct butterfly spreads with at least 3:1 reward-to-risk ratio, and make money regardless of whether the markets are going down or sideways.If you want to learn how to hedge like a pro, then don't miss Matt's presentation at the show.
Matt Choi, CMT
Duration: 42:39