What is Clear Focus Hedging?
Clear focus hedging is a risk management technique used by investors to minimize potential losses due to market fluctuations. It involves identifying and allocating assets that have the potential to generate returns in both positive and negative scenarios, thereby reducing overall portfolio risk.
Types of Clear Focus Hedging
- Cash-secured options trading using the Put-call spread and/or Collateralized options trading
- Stock-structured hedging using put and call options or other financial derivatives
- Nominal risk management techniques such as margining, stop-loss selling, and scaling investments
How to Implement Clear Focus Hedging
To implement clear focus hedging, you should first identify your investment goals and risk tolerance. Then, select assets that are aligned with these goals and have the potential to generate returns in both positive and negative scenarios. Next, create a portfolio that includes cash-secured options trading using put-call spreads or other financial derivatives, as well as stock-structured hedging techniques such as put and call options. Finally, regularly review and adjust your portfolio to maintain optimal risk levels.