Explore Your Options by Tom Gentile
PROTECTING YOUR SMALLER STOCK PORTFOLIO
How do I hedge 10 shares of Google?
Years ago, my answer would have been, “Get 90 more shares, then we can talk.” But as of last year, that all changed with the introduction of mini options. It has now been a year since this product was introduced, and I typically wait a year before trading anything new. Let’s visit this “small” section of options to see if it might be a good fit for the smaller trader.
In March 2014, the CBOE launched a new product for the smaller investor looking to hedge odd-lot securities called mini options. What are they, how have they performed during the past year, and who is most likely to benefit from using these options?