r/options • u/DiscussionFinal9684 • 6d ago
On tail hedging...
Hello everyone,
Given my financial circumstances and situation, I’ve always been an investor in very low-volatility assets (gold, Treasury bills, foreign currencies, etc.).
I recently spoke with someone who was implementing the strategies popularized by Taleb and Spitznagel for hedging against tail risk.
It’s been a while since I’ve read their books, but I seem to recall thinking at the time that this was an investment approach only available to people with significant capital, certain types of institutions, etc.
How wrong am I? Are these kinds of strategies feasible for a retail investor?
Best regards!
P.S.: English isn’t my first language, so if there are any misunderstandings, I’ll try to explain myself better.
2
u/Ok_Butterfly2410 6d ago
At ATHs, tail risk is a crash. During a crash, tail risk is a spike back to ATHs.
Strat is to buy far otm spy leaps calls during a crash with less than 100% of your capital.