SPY is around 778 and IV is unusually low today, so I was looking at cheap ways to hedge a portfolio while the market is near ATH.
SPY Nov 20 735/625 put spread @ $7.75
● Long strike only \~5.5% below SPY
● Short strike almost 20% below
● Cost: $775 per spread
● Max value: $11,000
● \~3 months of protection
I like the setup because the short put is far enough away that it shouldn’t kill the protection during a normal correction, while still reducing the cost substantially.
Anyone else taking advantage of the unusually cheap downside protection here? What setup would you use?
