from the desk of Dr. Terry F Allen

Skip navigation

Member Login  |  Contact Us  |  Sign Up

1-800-803-4595

A Timely Test of the Ultimate Hedge Against a Market Crash

A week ago I gave you details on how to use stock options to create the perfect hedge against a market crash.  Last Monday, a mini-crash took place.  It was the worst day for the market all year. While the market (SPY) fell 2.3%, VXX rose 7.6%.  The Crash Control portfolio I set up as a hedge against a crash gained 18%, and is poised to gain at an accelerated rate if the market continues to fall. 

The market totally vindicated my analysis.

First, the high inverse correlation between VXX and the market came true, and the options strategy we set up using VXX as the underlying had a high correlation with the price of VXX.  So when the market tanked, the Crash Control portfolio prospered.

The great thing about this market-hedge options portfolio is that it is designed to make a small profit even if the market doesn’t crash.  It’s like buying insurance and getting a settlement even though the bad event that you bought insurance for didn’t actually happen.

A Timely Test of the Ultimate Hedge Against a Market Crash

The link to the follow-up on the options market hedge strategy is:

A Timely Test of the Ultimate Hedge Against a Market Crash

I suspect you will find this market-crash options strategy is so complex that you would be happier just subscribing to Terry’s Tips, sign up for Auto-Trade, and have thinkorswim execute the trades for you in your account.

Tags: , , , , , , , , , , , , , , , , ,

Making 36%

Making 36% — A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins