Stock portfolio with protective puts on all positions

timothymhanna

Newbie
1 0
Hi Everyone!

New to the forum, long term reader! Great community!

I have an idea that I would like to test. Does anybody have any thoughts on constructing a stock portfolio and having protective puts on all positions? The idea for the stock selection is to find a certain setup that I always use, both long and short; and then buy protection on every trade. The thinking is that the max loss is per position and different thresholds of loss on the portfolio are clearly measurable. For example, worst case scenario, every setup fails both on the long and short side and I'm capped at the max loss for every position. BUT, if a number of the positions move favorably, I can calculate the profit on the portfolio at different levels.

Have you guys ever read any research on this specific concept or have experience on doing something like this?

Thanks for the thoughts!

Tim
 

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