Protect Your AI Bets From Destruction: Why Hedging Matters For All Traders | Investing with IBD

Did your portfolio take a hit as AI stocks got slammed? Insure your trades against black swan events and predictable upheavals by mastering hedges. Matt Caruso, president at Caruso Insights, talks hedging and why he still sees innovation yet to come from generative AI.
The Investing with IBD Podcast is hosted by Justin Nielsen and livestreams on KZbin every Wednesday.
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[@alphabeta8403]

11:00 Buying puts to hedge 20:00 *Concentrated positions* 25:00 Hedging can increase profitability 34:00 Keep it simple 39:40 GEV (Market positioning strongly) 50:00 *Similar to 90s*

[@B_M]

Matt Caruso has great place in my heart as well. He is a gem.

[@aggerleejones200]

He's correct in thinking about a hedge when the stock is extended but unfortunately most people will look to put on a hedge once the stock is already down, unfortunately it's too late at that point. Market is too smart you're not going to be able to hedge once the stock starts to break apart. The same with earnings you can't try to hedge earnings a couple days before the report. As earnings approach volatility gets higher because of the unknown outcome and when volatility rises the price of options, both calls and puts rise and become more expensive... You see people all the time buy calls right before an earnings report and after the report the stock goes up but their call option does not go up, it's called volatility crush volatility makes options more expensive and lack of volatility makes them less expensive so after The earnings report all the volatility comes out of the stock and all things being equal the options are worth a lot less, Typically you wanna buy options when volatility is low and sell options when volatility is high,

[@Steveocork]

Matt is great, logical as always

[@rosskennedy8356]

Great teacher! His course is excellent and easy to follow.

[@pedramissazadeh3705]

Keltner Channel 👍

[@DagaD_t]

Is there a digital version of the 100 year chart behind Matt? Or mb some1 knows how could i get one?

[@michaelcarley7016]

This is not really beneficial, especially when the particular stock is challenged by a foreign unproven low dollar entity that has no basis to do what someone claimed DeepS could do. Market corrections can and do happen a lot, but this was not that.