To hedge your QQQ position at $500 and protect against a significant drop, here are several common option strategies, depending on your risk tolerance and outlook:
1. Buy Protective Puts (Simple but Costly)
How it works: Buy QQQ put options with a strike below 500.
Example: Buy a QQQ 480 put (1–3 months out). If QQQ drops below 480, the put gains value and offsets your losses.
Pros: Simple, effective.
Cons: Costly upfront (premium paid), especially with high volatility.
2. Put Spread (Cheaper Hedge)
How it works: Buy a put (e.g., 480), sell a lower strike put (e.g., 450).
Example: Buy 480 put / Sell 450 put — limits max loss but also limits protection.
Pros: Cheaper than a standalone put.
Cons: Only protects within a defined range (here: 480–450).
3. Collar Strategy (Zero or Low Cost)
How it works: Buy a protective put and sell a covered call.
Example: Buy 480 put, Sell 520 call.
Pros: Often zero-cost or low-cost. Protects downside and generates income.
Cons: Limits upside above 520
4. Covered Put (If You’re Bearish Short-Term)
How it works: If you're okay selling some of your QQQ, sell a covered call and use the premium to buy puts.
Example: Sell 510 call, use proceeds to buy 480 or 470 puts.
I dont know yet, it depends on how we complete green A
If we have a clear 5 wave structure, then I will use 3 (it is unlikely QQQ can go much higher after a 5 wave up), and use some covered call to cover the put premium has less risk of getting called on those QQQ
But if we only have a 3 wave up to green A, I may just buy put spread first
To hedge your QQQ position at $500 and protect against a significant drop, here are several common option strategies, depending on your risk tolerance and outlook:
1. Buy Protective Puts (Simple but Costly)
How it works: Buy QQQ put options with a strike below 500.
Example: Buy a QQQ 480 put (1–3 months out). If QQQ drops below 480, the put gains value and offsets your losses.
Pros: Simple, effective.
Cons: Costly upfront (premium paid), especially with high volatility.
2. Put Spread (Cheaper Hedge)
How it works: Buy a put (e.g., 480), sell a lower strike put (e.g., 450).
Example: Buy 480 put / Sell 450 put — limits max loss but also limits protection.
Pros: Cheaper than a standalone put.
Cons: Only protects within a defined range (here: 480–450).
3. Collar Strategy (Zero or Low Cost)
How it works: Buy a protective put and sell a covered call.
Example: Buy 480 put, Sell 520 call.
Pros: Often zero-cost or low-cost. Protects downside and generates income.
Cons: Limits upside above 520
4. Covered Put (If You’re Bearish Short-Term)
How it works: If you're okay selling some of your QQQ, sell a covered call and use the premium to buy puts.
Example: Sell 510 call, use proceeds to buy 480 or 470 puts.
I need to first see how market moves towards 500
认定趋势上涨的时候？
1: 在波浪快到尾部开始加仓（周一周二加仓就是这个原因），继续跌就继续加（我说了计划中如果SPX掉到4500-4600就大买
2: 如果没跌到波浪看的底部就反弹，一旦反弹过了resistance + FA 面的变化就不等底部直接进 （周三的加仓）
这些都要事先做好计划。我上面说的都是提前分享的
If we have a clear 5 wave structure, then I will use 3 (it is unlikely QQQ can go much higher after a 5 wave up), and use some covered call to cover the put premium has less risk of getting called on those QQQ
But if we only have a 3 wave up to green A, I may just buy put spread first
Dont know yet, will wait and see first
In your example, the number 4 actually is number 3 : collar strategy