S&P500 (SPY) – New Year Hedge- Dec 31st, 2019

Hedging Opportunity – SPY $321.08

Wishing you a prosperous New Year from everyone at the OptionsPlay Team!

Market Outlook:
The S&P 500 (SPY) continues its march to all-time highs with only 1 trading session left in 2019 and nearly 30% gains. With strong economic numbers and an accommodative Fed, we expect markets to stay elevated in 2020. Despite strong momentum and relative strength, we see a high risk of a 5-7% pullback in the new year as market internals start to show cracks on this rally. 

SPY Market Hedge Idea:
With an elevated risk of a market pullback and support just above $300, we suggest initiating a hedge if you are concerned about a pullback in January. Use this 320/300 Put Vertical on SPY to hedge your portfolio against a downturn in the markets before the March expiration. This trade costs only 1.3% of the underlying stock portfolio to initiate a hedge against a 7-8% correction in the markets. 

Learn to Trade: Hedge Your Portfolio – Jan 2nd @ 4:15 PM EST

Thank you for your support of OptionsPlay in 2019 and we look forward to serving you in the upcoming decade!

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