[ones_and_zeros]

What is the end game with this strategy? If you sell the puts today to capture the profits, do you also sell your equities? If you don't sell your equities isn't there a chance the slide further? If you hold the puts to maturity why buy them at all?

[tempsy]

The end game is to save the value of my account without having to sell holdings I want to keep long term for tax reasons.

I'm up 8% for the year instead of down 15%.

[the_gastropod]

Maybe you really are more clever than the rest've us, and have beat the market. Or maybe you got lucky. Or maybe we're only hearing about the winning trades, and you've got some losers we're not hearing about... I suspect it's option 2 or 3. Regardless, this is bad advice.

[theincredulousk]

It isn't bad advice to hedge your position with options, although doing it short term as suggested here is an active trading strategy and inherently more risky.

Contrary to popular belief that options = gambling, this is the #1 real utility of them. If 90% of your investments are tied up in S&P 500, it makes sense to hedge that with put options which provide a clearly defined max-loss over the contract duration of the option.

So in a period like this when those put options become valuable due to price drop and general IV, you can do as suggested and sell them to re-coup losses and maintain capital. It doesn't change the lifetime performance of your money placed in the corresponding security, but it most certainly improves the performance of your portfolio as a whole and limits the damage that can be done in any given downturn.

If you only hold securities, index or otherwise, your only recourse is time. I certainly wouldn't recommend trying to time the market, just like I wouldn't buy an insurance policy the day before a loss. That doesn't mean you avoid insurance altogether because you can't predict when you'll need it.

[codingslave]

No he just dampens his returns by protecting against extreme downside black swan events

[mars4rp]

Your puts are going to expire at some point, what after that? you sell all your holding after expiration? or you buy more puts? puts are expensive, I started 2 weeks ago and paid 7% of my portfolio in premium just as insurance.

[asdff]

You sell them before they expire for profit.

[herstjnr5nr]

If the market drops less than your put strike price, you can sell the puts and keep the shares. If it drops more, you exercise the put, which results in selling the shares at the strike price.