Hedging

Markets are starting to debate a provocative macro thesis: Scott Bessent at Treasury and Kevin Warsh at the Federal Reserve are signaling that they may tolerate pain in the bond market and weakness in the U.S. dollar if that is the price of keeping nominal equities supported. That does not mean a Plaza Accord 2.0 is guaranteed. It does not mean policymakers will stand at a podium and announce, “We are devaluing the dollar.” Modern currency regimes rarely work that cleanly. But it does mean investors should take seriously the possibility that policy reaction functions are changing. If fiscal policy remains equity-friendly, if monetary policy communicates less fear of asset-price inflation, and if Treasury policy prioritizes financing flexibility over bondholder comfort, the market can do the devaluation work by itself. ...

Both a protective put and a collar are ways to hedge stock you already own against a decline. The question that separates them is simple: are you willing to give up some upside to lower (or eliminate) the cost of that hedge? A protective put says no: you pay full price for pure downside protection and keep all your upside. A collar says yes: you sell away some upside to help pay for the same protection. ...

When stocks rally quickly, investors usually face the same emotional trap: fear of missing out on one side, and fear of giving everything back on the other. Add geopolitical uncertainty (wars, shipping disruptions, sanctions, elections, commodity shocks), and it gets harder to stay disciplined. Here’s a practical way to handle a run-up without trying to predict the headlines. If you want a broader decision map first, start with the Option Strategies Guide. ...

Watching your portfolio fall 20% is rough. It feels personal, and the urge is to do something right away. But a drawdown is also just a problem to work through, and the first job isn’t to win the money back quickly. It’s to stop making it worse, protect what’s left, and rebuild with a plan. Here’s the process I’d follow, and where options can help along the way. Step 1: Figure out what’s actually broken Go through every position and put it in one of three buckets: ...