Half of US stock fund assets are now invested in index funds

Re:Half of US stock fund assets are now invested in index funds by whitepoplar on Monday May 27, 2019 @09:00AM (#20021797)

Tail hedging seems great in theory and I know that several professional investors do it (Universa, Nassim Taleb, etc), but I'm not sure how they make it work. S&P500 out-of-money puts are expensive and it just seems that years or decades of put losses leading up to the "big event" could run you dry.

[ Parent | on HN ]

Re:Half of US stock fund assets are now invested in index funds by naveen99 on Monday May 27, 2019 @01:12PM (#20023655)

http://www.fooledbyrandomness.com/FatTails.html

[ Parent | on HN ]

Re:Half of US stock fund assets are now invested in index funds by naveen99 on Monday May 27, 2019 @09:35AM (#20022058)

sell at the money monthly straddles to finance the otm puts ?

[ Parent | on HN ]

Re:Half of US stock fund assets are now invested in index funds by mrigor on Monday May 27, 2019 @05:16PM (#20025310)

selling insurance to buy insurance defeats the point, ATM options only pay for expected moves so you have no protection gain with your strategy

[ Parent | on HN ]

Re:Half of US stock fund assets are now invested in index funds by naveen99 on Tuesday May 28, 2019 @03:18PM (#20033384)

The point is giving up some upside gain for downside protection. You are net selling insurance, with a slight bullish bias.

[ Parent | on HN ]