Short the market before 9/11?

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am interested to hear your vehicle of choice.

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I was looking at an ultra short etf on the s&p like SPXU which is 3x inverse of S&P.

Unfortunately, I'm not knowledgeable enough to know how to use options to hedge my portfolio. I would guess that would be the best way to do it without having to put up so much cash to buy the ETF. I haven't worked the numbers, but guess I'd have to put up about 1/3 of my portfolio value in the ETF to do a ball park hedge. I'm sure I wouldn't have the 'nads to do that, but was considering at least something.

I'd love someone to shoot holes in this...fire away

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I just can't bring myself to be hoping there is a terrorist attack on us.

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I'm pretty sure you know that hedging against acatastrophe is not hoping they will happen, but protecting oneself in case it does...one doesn't buy fire insurance hoping for a fire....usually

I could shoot holes in trying to time any short position, but rather than that, let me say this. I see insuring your portfolio's gains as prudent. Hardly anyone does this, and yet I'd like them to shoot holes in this simple concept. Your analogy to fire insurance is exactly correct in my opinion.

Buy VIX calls. What you pay for them (called premium) is also your maximum loss. While it's not perfect, some insurance is better than no insurance. There is all sorts of information out there about what size of position you need to take to insure whatever size of portfolio you have. I can factually state it is no where near the percentage of your portfolio you mention above.

FWIW, I see buying insurance on my gains as prudent, but it is painful to watch the VIX calls expire worthless, or sell to close at a loss. Having said this, I don't much care for paying insurance premiums either, but I pay them, and I see this as very similar. I don't ever want to make a claim on either my fire insurance, or my VIX calls, but when there is a 20% adjustment downwards, it sure is nice to sell my VIX calls to recoup most of the paper loss. Just as it is nice if one of my buildings burn, to have some sort of fire insurance recovery. With this cash from the VIX gain, because a paper loss isn't really a loss the way I see it, I buy, or at least attempt to buy decently valued stocks when most everyone else doesn't have any capital left and/or is scared.

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Buy VIX calls.

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I'm looking at buying VIX calls or buying SPY puts. I'm reading that the SPY puts are more expensive, but correlate better.

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I don't ever want to make a claim on either my fire insurance, or my VIX calls

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What percent of your portfolio value do you try to hedge?

one of many strategies using VIX

Do you have a formula you use to determine what VIX position you take?

I try to get a 30 delta on the majority of my gain.

Usually 1-3% over my cost basis.

That's not exact, I don't cover my gain from day one. Many times I pick an arbitrary figure based on whatever portfolio amount I want to keep intact as to keep the cost down. e.g. If my portfolio is worth $100K I don't cover $100K, I might be comfortable with having $80K intact in a worst case scenario. A higher deductible so to speak.

Good short term play. It's a note, so be careful as they often eat up nav and are hugely subject to credit risk, contango and backwardation.

Two stocks that would benefit greatly from any type of terrorist or gun related event in ruger and smith&wesson. Any large event will send people back rushing to the shelves for guns and ammunition.