Here’s A Way To Cheaply Protect Against A Market Downturn | Investors Alley

Here’s A Way To Cheaply Protect Against A Market Downturn

August 10, 2022 8:00 am by Jay Soloff

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Hedging against downside protection can be expensive. Using options can alleviate some of the cost by utilizing a spread trade, such as a butterfly. A trader recently placed a large put butterfly on for August in SPDR S&P ETF (SPY) options. The trade only cost 20 cents in premium but could pay out significantly more if the market drops near 52-week lows over the next few weeks.

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Here’s A Way To Cheaply Protect Against A Market Downturn

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