Hi,
Quick question: imagine you would want to hedge a portfolio, with lots of well-diversified positions consisting of stocks and derivatives, against a “black swan” type of event. The portfolio currently generates some positive returns if the underlying stocks (market in general) goes down 10-20%, but from 25-30% downwards it pretty much turns ugly quite fast.
How do you protect yourself against that? Obviously, by just buying puts on, say, SPY, you’d likely over-pay for insurance as you…