Hedging sounds like a smart thing to do. But has it actually worked? This post examines the historical costs and benefits of hedging stock exposure with SPY puts.
Interest in hedging strategies tends to increase as market volatility rises. There are many ways to hedge, and a common method is to overlay SPY puts to protect existing stock exposure. Being long a put option offers limited downside and unlimited upside, but this attractive payoff profile comes at a cost, since traders are (mostly) smart and price options accordingly.
Hedge Structure
The data in this post