Oil Prices and Stock Performance: How to Hedge Your Portfolio With Options
Oil prices reach into almost every part of the market. A fast jump in crude helps energy stocks, but it raises costs for airlines, truckers and manufacturers, squeezes consumers at the pump and pushes up inflation expectations. A sharp drop does the reverse. Because the effects are so uneven, a portfolio can get riskier even while the index looks calm. If you hold a diversified stock portfolio, options are a practical way to put limits on that risk without selling the holdings you want to keep. ...