The Black Swan Hedge (Make $20K+ During A Crash)

Are you tired of the anxiety that comes with the fear of a market crash? Well, you’re in the right place. Today, I want to introduce you to the powerful and straightforward “Black Swan Hedge” strategy, which can potentially help you make $20,000 or more during a market downturn. Let’s dive into the details and learn how you can implement this strategy to protect your portfolio.

Understanding the Black Swan Hedge

It is a trading strategy designed to profit from market crashes by combining the sale and purchase of put options. The goal is to create a hedge that pays off when the market takes a dive. Here’s a breakdown of the key steps:

Selecting the Options: Start by choosing options with approximately 45 days until expiration. Look for the S&P 500 futures (ES) or mini futures (MES). Sweet Bobby, a notable trader, recommends focusing on the 15 Delta for selling a put and the 14 Delta for buying three put options.
Structure of the Trade: By selling a put at the 15 Delta and buying three puts at the 14 Delta, you create a trade that minimizes your upfront costs. This structure allows you to profit as the market goes down without putting up a significant amount of capital.
Potential Returns: While the maximum loss is capped at the initial investment (around $1,700), the potential gains can be substantial. Depending on the severity of the market crash, you could make anywhere from $10,000 to $166,000.

Why Choose the 15 Delta and 14 Delta Levels?

The decision to use the 15 Delta for selling and 14 Delta for buying in the Black Swan Hedge is strategic. By focusing on the one standard deviation level, where many traders experience losses, this hedge acts as a protective layer. When combined with your other trades that might be vulnerable in this range, the Black Swan Hedge can offset potential losses and even turn them into gains during a market downturn.

Automating the Black Swan Hedge

To make the Black Swan Hedge even more accessible, you can consider automating the process. By using options auto-trading software, like the one I’ve been working on, you can set up the Black Swan Hedge to execute automatically every month. This ensures that you have consistent protection without the need for constant manual intervention.