Last week it seem 49ers coach Jim Harbaugh was almost traded to the Cleveland Browns. Rumor has it he wanted more money and more power (what else in new). I am not a student of the game in the same way our fearless leader Steve Lentz is, but I have never heard of a coach being traded. Players, cards, coins, cigarettes in prison – yes. But not a coach. Anyway it seems that is off the table at least for now. I wonder how he did at the combine?
When markets reach new highs there is a tendency to consider ways to protect against a selloff. If you are long stock, a basic and effective way is to buy a put. A put give the owner the right to sell a stock at a predetermined price within a predetermined time. For example, if I own AAPL and I am a bit nervous I might buy a put to protect from a selloff. The amount of protection and how long I am protected is based on the strike price and month of the put. If I don’t want to lose more than 5% or so, with AAPL around $530, I would look to buy a put with a strike price of 500 or 505.
Remember, the more protection the higher the price. And if I want to be protected going out to June I would want to buy the June 500 put, which will cost more than the April puts. Like all insurance, more time of coverage and smaller deductable (more protection/less out of pocket) equals more cost. There is no right or wrong here. Each investor or trader must look at his or her own risk/reward scenario and make the choice most suited to their own individual situation.