Derivatives Strategy for Stock Depreciated 50 Percent?

#1
Say I have a stock or portfolio of stocks that has reduced in market value by 50%.

What strategies in stock/derivative (using options/futures) can I take to recover?

As I understand, using a long put will not reduce the value of the portfolio, but there will be reduced upside too because of the hedge.

Thanks for your help.

Cheers.
 

Alchemist

Administrator
Staff member
#2
Buying puts may work for short-term positions, but for long-term positions, buying puts will be a very expensive strategy.

If a stock or portfolio has depreciated by 50%, I assume that it is a long-term investment.

Stocks or portfolios don't depreciate by 50% in the short-term.

You can't do much in derivatives for long-term positions, except maybe writing calls.
 
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