Sunday, November 18, 2012

Keeping Some Portfolio Insurance in Place

CCI has continually been keeping a short put spread on the S&P500 (SPY) in the portfolio as a bit of insurance for a down move.  When last discussed here CCI had rolled the put spread to July.   Through the summer, CCI has been keeping this position in play.  During the market upswing of July, September and October these puts spreads were losers. (i.e. the cost of insurance).  With the expiration of November options last week, the put spread paid out reasonable nicely last month.  The portfolio is still overall down on these trades for the year. This should be expected in a year when the market is up.   CCI continues to hold this type of position in the portfolio to try to buffer any potential downturn.   Specifically, currently the portfolio has established the Dec $138- $131 put spread as a small hedge for any potential down draft in the coming weeks. 

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