Buy protection when you can, not when you must
That's what every risk manager preaches.
Yet here we are, S&P puts at multi-year lows, and nobody wants them.
Classic herd behaviour.
Markets are ripping. VIX is sleepwalking. Everyone's forgotten 2022 even happened.
But here's the thing about cheap insurance: it's only cheap when the house isn't on fire.
Right now, 95% S&P puts are trading at levels we haven't seen for a while.
Meanwhile, the setup is getting spicy, with Trump threatening 30% tariffs on the EU and to remove Powell.
The S&P is trading at all-time highs, so a pullback would be totally normal. Healthy even.
But try explaining that to your unhedged portfolio when it happens.
Warren Buffett once said: "Be fearful when others are greedy."
Well, greed's at 100. Fear's at 0. And protection is not expensive by historical standards.
So here's my question:
When disaster insurance is this cheap, why is nobody buying?
Are you hedging at these levels, or riding the wave naked?
