Portfolio Hedge: 20 April 2026

Returning Home after a Day’s Fishing – Indonesia

With last months hedge position expiring with a small $314 profit last Friday I need to make a decision as to whether to continue to hedge my portfolios or to leave them unhedged – since last month’s hedge turned out to be unnecessary as US Equity markets surged over 12% higher in the past 3 weeks.

This is how the profit/loss graph of that position looked at expiry (after all adjustments):

The SPX closed at ~7100 after breaking through strong resistance at 7000.

Despite the nice bounce, I still feel that the recovery was largely unjustified, and at least a little overdone, with an exponential rise following a relatively stable/calm first 3 months of the year and no particularly encouraging signs in the geopolitical and economic environments.

Yesterday I decided to initiate a new hedge position that will expire 15 May. As for last month’s hedge I have started by buying the 7000-6950 Put Spread and financing that through the sale of a 7250-7255 Call Spread for a net credit of $250 on 5 contracts – I actually made a mistake in placing the order and should have brought in $300:

The darker blue shaded area in the above screenshot represents the +/- 1 Standard Deviation band for the for SPX for the period to expiration.

This position has a maximum profit of ~$2,700 with SPX Closing below 6950 – the prior resistance level – at expiration. The position has a maximum loss of ~$2,300 should SPX continue it’s climb and close above 7255 – assuming no adjustments were to be made.

This hedge is designed to protect a $100,000 portfolio and will be adjusted as necessary. As/if we near 7000 I will be looking to adjust for more downside protection and I will keep this post updated as appropriate.