As we approach the end of the year, protecting your portfolio becomes just as important as finding opportunities for growth. With the market showing signs of both seasonal strength and underlying risks, I’m focused on strategies that balance upside potential with robust protection against unexpected disruptions.
This year has been a strong one for bulls — no question.
We’ve seen all-time highs in major indexes, massive moves in Bitcoin, and big wins in sectors like Tech and Industrials. But as good as 2024 has been, it’s no time to get complacent.
All the “good stuff” — from solid earnings to dovish signals from the Federal Reserve — is already priced into the market. That leaves us vulnerable to any surprise sell-off or profit-taking, especially with key economic data and Fed decisions still looming.
One of the biggest risks is what I call a “blindside event.” This could be anything from disappointing Nvidia (NVDA) earnings to an inflation print that forces the Fed to hold rates steady or even go hawkish.
If markets start to roll over, you don’t want to be left without a plan.
Strategies for Adding Protection
To prepare for potential volatility, I’m layering multiple levels of protection into my portfolio. Here’s how I approach it:
- Options for Hedging:
Credit and debit spreads are central to my strategy. With credit spreads, I can take advantage of premium income while leaving room for price movement. The beauty of this setup is that I can repair trades if the market turns against me.
Collars are another favorite — selling a covered call to finance a long put. This creates a “free hedge,” where the call premium offsets the cost of the put. If prices drop sharply, the put kicks in to protect the downside while I maintain flexibility for future trades. - Cash Management:
Roughly 40–45% of my portfolio is in cash right now. This isn’t just about safety — it’s about staying ready to deploy capital into opportunities if the market pulls back. I’d rather be patient and buy into strength after a flush than chase prices in overbought conditions. - Hedges on Indexes and Futures:
When the market moves as one — risk-on or risk-off — you need protection across the board. I’ve added long puts on the S&P 500 (SPX) and Nasdaq (NDX) to hedge against broader market declines. These trades are designed to offset losses in case of a significant pullback.
The bottom line is that upside is easy when the market melts higher — but surviving the unexpected requires preparation. My approach combines short-term income trades, longer-term positioning, and hedges to navigate the unknowns.
Protecting your portfolio isn’t about avoiding risk… It’s about managing it wisely. If the market surprises to the downside, I want to be ready to weather the storm and take advantage of new opportunities as they arise.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
-
- Telegram: https://t.me/+av20QmeKC5VjOTc5
- YouTube: https://www.youtube.com/@ChrisPulverTrading
- Twitter: https://x.com/realchrispulver
- Facebook: https://facebook.com/therealchrispulver
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. The Monday Trade Targeting $1K Each Week!
Look at this $1,000…
What if you could target this amount week after week with a strategy that has a win rate above 93%?
After having worked with tens of thousands of folks across 40 different countries…
And spending nearly 30 years on Wall Street managing million-dollar accounts, I’ve decided to do something completely different.
I’m on a special mission to show 100 more people — regular folks from all walks of life — how to target an extra $1,000 in income every single Monday.
The best part? It takes just 2 minutes each week.
The profits and performance shown are not typical, we make no future earnings claims and you may lose money. From 9/30/24 – 11/7/24 on live trades the win rate is 100%, 17% average return, with an average hold time of 11 days.
