Watch the video to hear Damien Fleurance, Managing Partner at Cadogan Risk Management, discuss options strategies that commercial traders can use to hedge their physical positions. Following a brief review of options theory and delta, Damien reviews a long call, collar, and short put strategy. Using real-life examples he demonstrates the cost, benefits, and risk management used for managing price increases for a physical position, along with trader insight.
In part two, Damien Fleurance discusses options strategies that commercial traders can use to protect their physical position from a decline in market prices. Damien evaluates a long put, collar, and short call strategy, displaying their cost, payoff profile, and risk tolerance on a physical position during a market decline. Additionally, he discusses volatility and other variables that he considers when trading options.