using options as tools for hedging, 4 techniques available to anybody:
"Another reason to desire a hedge on a long position would be that you believe the market is going to correct, and stocks you own are going to go lower with it, but you still believe that in time the names you hold can move higher. A hedge can temper the short-term pain or even provide profts you can re-invest after such a correction takes place, if it does take place.
There are several paths we could take to hedge our bets with options and these are the focus of this blog.
First, some background: there are two kinds of options. A call, and a put.A call is a contract between you and someone else where one party agrees to give the other the right to buy a share from them by a certain time for a certain price in exchange for a premium.."
Required for SIMM.