How to Protect Your Portfolio Amid Rising Risk

The video tutorial discusses strategies to protect gains in the S&P, focusing on using options like calls for portfolio protection. It highlights the seasonality of equity markets in November and December and suggests swapping long equity exposure for call options to maintain upside potential while minimizing losses. Additionally, it covers the surge in hedging activities in the high yield ETF market, indicating increased nervousness in credit markets.

What is one strategy mentioned for protecting gains in the S&P 500?

• Increasing cash reserves

• Buying real estate

• Using call options

• Investing in bonds

Why might investors consider using call options instead of just puts?

• Call options are cheaper

• Call options are risk-free

• Puts are not available for S&P 500

• Call options offer potential upside

What is a potential benefit of swapping long equity exposure for call options?

• It increases dividend income

• It eliminates all market risks

• It provides continued market upside with limited loss

• It guarantees profits

What is the ratio of put options to call options in the high yield ETF (HYG) hedging activity?

• 6 to 1

• 8 to 1

• 4 to 1

• 2 to 1

What recent market event has started to impact credit markets?

• A surge in gold prices

• A rise in interest rates

• Equity volatility and sell-off

• A decrease in oil prices