My company just went public and the price has doubled since. I can't sell for 6 months. Is there anything I can do to help protect from the market falling? A coworker mentioned shorting the sp500, or shorting tech. Is this a good idea?
You could hedge multiple ways. Put spreads on Nasdaq that are 6 months out. Options on tech stocks open a few months after IPO, so if you were allowed to hedge directly you could buy put spreads on your own equity as a hedge. I doubt you’d have the cash to cover the margin for naked short stock alone.
Sitting on a short for 6 months? Yeah right Put is a simple protection device. It’s probably expensive in your case if at all available
He literally said protect/hedge. If his basis is $1 and the stock is $70 he’d be stupid not to. Guess you didn’t have equity in the ‘01 or ‘08 cycle.
What’s the ticket?
No. If you don’t know what you’re doing, you’ll probably just make things worse. Even if you do know what you’re doing, you’ll probably make things worse.
😅just relax
If you just want to de-risk, rebalance your portfolio with more uncorrelated stocks (e.g. different sectors, caps, etc), bonds, alts, or cash equivalents. If you want to speculate about market downturns... SPY Put ladders... Or just don't.
If you dont need the money in 3 years, just dont look for the next 36 months. Think of the dip as an opportunity to buy more.. it will go back up.
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Buy put options?
Can't short your own company.
There may be rules against options trading, but puts are not shorts. You don’t earn on a drop, you just protect your existing investment.