Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Investment and Options Strategist
Summary: In part two of our guide, we expand on how to use put options as a "profit-insurance" for each of the Magnificent 7. Tailoring strategies for each stock, we help you secure your portfolio against volatility, ensuring your tech investments remain robust through market ups and downs.
Introduction
Welcome back to the second installment of our series on safeguarding your investments in the tech sector's elite—the Magnificent 7. In our previous article, we laid the groundwork by using Microsoft as a blueprint to understand how put options function as protective insurance for your stock gains. Now, we're ready to broaden our horizon, applying the insights gained to the entire lineup of these tech giants.
From Apple to Tesla, we'll navigate the options landscape for each of these market leaders, providing you with a toolkit of strategies to maintain the robust health of your portfolio, regardless of market tremors. We'll explore varied expiry dates and strike prices, tailoring the hedge to fit the unique position of each stock in your collection.
Prepare to fortify your investment knowledge further, as we delve into the practical steps and considerations for selecting put options that align with your investment goals and risk appetite. Let's continue our journey towards confident, informed investing in an unpredictable market.
You can find part 1 of this serie here: Investing with options - Securing your tech stock gains with simple hedging strategies - 1of2
Important disclaimer: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.
You can jump directly to one of the Magnificent 7, by clicking on one of the links below:
5% Drop: New stock price = $404.23 * 0.95 = $383.82
10% Drop: New stock price = $404.23 * 0.90 = $363.81
15% Drop: New stock price = $404.23 * 0.85 = $343.80
5% Drop: New stock price = $182.33 * 0.95 = $173.21
10% Drop: New stock price = $182.33 * 0.90 = $164.10
15% Drop: New stock price = $182.33 * 0.85 = $154.98
5% Drop: New stock price = $731.73 * 0.95 = $695.14
10% Drop: New stock price = $731.73 * 0.90 = $658.56
15% Drop: New stock price = $731.73 * 0.85 = $622.47
5% Drop: New stock price = $141.04 * 0.95 = $133.99
10% Drop: New stock price = $141.04 * 0.90 = $126.94
15% Drop: New stock price = $141.04 * 0.85 = $119.88
5% Drop: New stock price = $168.05 * 0.95 = $159.65
10% Drop: New stock price = $168.05 * 0.90 = $151.25
15% Drop: New stock price = $168.05 * 0.85 = $142.84
5% Drop: New stock price = $471.20 * 0.95 = $447.64
10% Drop: New stock price = $471.20 * 0.90 = $424.08
15% Drop: New stock price = $471.20 * 0.85 = $400.52
tsla
5% Drop: New stock price = $199.68 * 0.95 = $189.70
10% Drop: New stock price = $199.68 * 0.90 = $179.71
15% Drop: New stock price = $199.68 * 0.85 = $169.73
As we wrap up our exploration of using put options to protect investments in the Magnificent 7, it's crucial to remember that the strategies and examples provided throughout this series are intended to serve as inspiration and a starting point for your own investment journey. The financial markets are in constant flux, and it's very likely that by the time you're reading this article, the prices of the stocks we've discussed—and consequently, the cost of associated options—will have changed.
This reality doesn't diminish the value of the insights shared but rather underscores the importance of understanding the underlying thought process. Adaptability and informed decision-making are key. You may find that different strike prices or even different expiry dates better suit your needs as market conditions evolve. The goal of this series has been to equip you with the knowledge to navigate these decisions confidently, tailoring your approach to option trading to fit your unique investment profile and objectives.
Remember, the journey to becoming a savvy investor is continuous. As you gain experience and insight, your strategies will naturally adapt to reflect your growing expertise and the ever-changing market landscape. We encourage you to use what you've learned as a foundation, building upon it with further research as needed. Your investment path is uniquely yours—make informed choices, stay flexible, and keep your goals in sight.
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This article may or may not have been enriched with the support of advanced AI technology, including OpenAI's ChatGPT and/or other similar platforms. The initial setup, research and final proofing are done by the author.
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