Skip to content

The Markets, Economic Data, and My Black Swan Approach – Scala Volpe Capital

At this point I think it would be helpful to illuminate what I’ve been doing both in reaction to the economic data and to be proactive to what I think is still to come.As you may have read already on my Portfolio page, I do employ black swan protection protocols rather consistently month to month.What this means is, each month I purchase the following months’ put options on the SPY (the underlying investment symbol for the S&P500 stock index).These put options, which reflect a bearish outlook on the underlying investment, are bought “out of the money,” meaning the anticipated price (or strike price) that I’m purchasing is below the actual price of SPY as it stands today.So for example, SPY closed around 107 today, and my September puts have a strike price of 100.If the SPY were to make a sharp move downward below 100 before September 18 (the day my options expire), I would profit handsomely.If the puts expire out of the money I’ll lose my entire initial investment sum.

Post a Comment

Your email is never published nor shared. Required fields are marked *