The $360 Portfolio Hedge
By Brandon Chapman, CMT
Hey trader,
Hedging is more than just buying puts.
With outright puts, the premium bleeds, the market grinds higher, and they pull the hedge off two days before the move they were trying to protect against.
It’s like paying full price for insurance you may never use.
There is a way to pay for that put with another trade and net the cost down to almost nothing.
A $100,000 SPY position can be hedged for the next 30 days for $360 net right now. That is the put cost minus the credit collected on a call spread sold against the same expiration.
The Block Hunter Console caught institutions running this same math at scale yesterday. 75,000 SPY puts hit the $685 strike, 60,000 more landed at $700 for May 8, and 15,000 XLF puts traded in the same session.
The $685 print is the one that matters.
SPY is sitting near $710. A $685 put is $25 out of the money with a 3 delta on it.
Three delta means roughly a 3% probability of expiring in the money.
No institution buys 75,000 contracts at a 3% probability for the upside. They buy that strike to cover a long book against a 10% drop they cannot afford to leave unhedged.
The retail version fits a $100,000 SPY position cleanly: Two puts, four call spreads, $360 out of pocket, and a built-in roll mechanic that books $1,000 every time SPY drops far enough to put the put in the money.
P.S. The Console flagged coordinated institutional hedging across SPY and XLF before the broader market picked up on the signal. That is what it does for the setups it tracks every session.
The Block Hunter Console has lit up opportunities producing 375% on KSS in 13 days, 206% on PLUG in 5 days, and 100% on VFC in just 24 hours.
Click Here To Watch the Block Hunter Replay
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