Retail investor: I buy puts to protect my portfolio in case of a crash. Peace of mind.


Me: How often does that protection actually pay off?
Retail investor: Almost never honestly. But it helps me sleep.
Me: So you're paying a bill every month for insurance you rarely use, dragging your returns the entire time?
Retail investor: ...I never added up how much it's cost me.
Me: & the one time you'd want them most, in a crash, they're the most expensive because fear just spiked the premiums.
Retail investor: So buying protection is kind of a losing setup?
Me: I flip it. I SELL puts & collect that fear premium instead of paying it. My protection is owning great companies & never being over leveraged.
Don't bleed money every month on insurance you'll almost never cash in...
Buying puts is a quiet tax on your returns.
Sell portfolio secured puts & collect that premium instead of paying it.
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