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McMillan also writes a Stocks & Commodities article on this in the
August issue
Bob R wrote:
Larry McMillan writes about using the VX volatility futures as insurance in
his second edition of "McMillan on Options". Try the w.cboe.com for
information on VX futures.
BobRA
----- Original Message -----
From: "Barry Kaufman" <102577.325@xxxxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Monday, October 04, 2004 9:58 AM
Subject: Insurance against market crash
I am asking for advice on how to insure against a market crash.
I trade intermediate term to long term end-of-day (10 to 40 trades per
year). And trade only market indexes, namely index funds and ETF's for
SP500 and Russel 2000. I can also proxy a short of SPY or RUT by buying
RYDEX or PRO Funds that go against the market. Most of my money is in
Keoghs and IRA's and subject to no shorting regulations.
My trading systems work fine for me but what scares me is a potential
big, violent crash due to unexpected catastrophic news, namely
terrorism. I am thinking about the market close after 9/11, the abrupt
down draft in 1987, and didn't the market close for three months when
world war 1 started?
So, what kind of insurance is there? Leap put options on indexes might
be the answer but I don't know anything about them. I am asking to be
lead in the right direction to do research.
By the way, if the exchanges did close for an extended period, then
would option expiration date be extended?
Thanks, Barry.
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