The Kennedy Hedge
$17,000 profit per tranche during the Feb 2018 short-vol implosion
About the Kennedy Hedge
The Kennedy Hedge is designed to be a cost-less way to add crash protection to your portfolio. Note that this trade will not help in mild corrective markets. See our other trades for setups that take advantage of corrections. This trade will kick in hard in a crash and offer profit to offset losses as well as significant margin boost to counteract exploding margin requirements and forced liquidations at inopportune times.
- Average Trade Cycle: variable depending on preferred setup
- Profit Target: n/a
- Required Capital: $125 P/M per tranche
- Win/Loss Ratio: n/a
- Annual Expectancy: 0%
Why employ the Kennedy Hedge?
This strategy is designed to protect against black-swan market events (fast, hard, crashes and/or mini-crashes). Specifically, the benefits are:
- Profit from a crash
- Large margin boost during crash, preventing forced liquidation at market bottoms
- Cost-less during almost all market conditions
Kennedy Hedge F.A.Q.
How can a hedge be cost-less?
Due to the setup of the options and spreads used, in approximately 99% of market conditions, profits will accumulate heavier than losses.
Can the hedge be added at any time or do I need specific market conditions to put it on?
It can be added at any time and in any quantity (subject to available liquidity) you choose.
Can I do this with a RegT account?
Certainly, but the margin requirements would make the trade a very very poor use of margin.