Trade Alert: Buying puts to hedge the portfolio

A couple other trades I’m putting on today. I’m adding to my LPS and Morgan Stanley short positions via puts. Been a long time since I felt the need to be get more aggressive on my short hedging. I still think the path of least resistance for the overall markets and for tech in particular is probably higher for the near-term, but we have had a huge run in the portfolio with a lot of our stocks up big as we’ve had the discipline and foresight to stay aggressively long during this rally.

I’m not making any major changes to the portfolio, but I am nibbling on a small position in some new LPS puts, looking out into December and bidding on puts with strike prices ranging from $28 to $30. That means if LPS is lower in December than these levels today, I’ll likely make some good money on the trade. If not, it’ll be a hedge that I lost money on.

Same thing with some new Morgan Stanley puts. I’m bidding on some October-December puts with strike prices around $15.

If you don’t feel comfortable trading options, you could consider just shorting some of these two stocks common shares. Ask your broker if you can.

And if you don’t feel comfortable trading options or shorting stocks at all, please consider just trimming some of your biggest long positions to raise a little cash while the sun is shining on the markets.