VIDEO: BSH Session 3 - A Hedge Is Easy to Buy, Hard to Hold
and Hardest to Monetize
This session was the culmination of our three-part Black Swan Hedging series. While Sessions 1 and 2 focused on the building blocks and the individual strategies, Session 3 focused on the question every trader eventually faces:
“What do I do when the hedge actually works?”
Ironically, this is where many traders make their biggest mistakes.
The session was especially timely because the market finally experienced a meaningful selloff after months of relentless buying. Volatility expanded, hedges began to react, and members could see in real time why we had been discussing tail-risk protection back when volatility was cheap.
The full Part 3 recap — putting the entire series together — is below for paid members.
Why We Built This Series
One of the biggest themes throughout the session was that most traders spend all their time learning how to enter trades but very little time learning how to survive market shocks.
As premium sellers, we make money because realized volatility is normally lower than implied volatility. The entire options market is built around this principle.
However — the reason premium selling works is because occasionally markets experience sudden volatility shocks, crashes, or Black Swan events. Those rare events are what create the need for hedging. Without occasional market panics, option sellers would never earn a premium for taking risk.
Watch the Full Video Here:
