Protecting Your Portfolio With Put Options On SPY

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About: SPDR S&P 500 Trust ETF (SPY)
by: David Pinsen
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Summary

Demand for hedging against a sharp drop in the S&P 500 has gone up recently, as Michael Mackenzie noted in his FT column over the weekend.

For readers looking to add protection to their own portfolios, I show a simple way of doing so using put options on SPY.

I close by noting a drawback of this approach.

The trade war between the United States and China continues to be a risk factor for the market, as Michael Mackenzie noted in this weekend's Financial Times (image via Binmei.Jp).

A "Strong Appetite" For Downside