Astute Millionaire – LUV Update #2
Good day again Millionaires,
We are going to elect to re-hedge our shares as this market seems to be bullish for the long term and having further consolidation and potentially the return of volatility on the short term. At the time of this update, LUV is trading at 53.06 and we are going to elect to re-hedge our shares here.
We are going to use part of the initial put spread proceeds and hedge a portion of our shares as LUV has already seen a pullback in excess of 6% over the week. We will buy 5 of the 53-50 put spread.
Risk & Reward
Our new put spread is priced at 0.93 x 5 contracts = $465. Recall that we have a total of $950 to use (from our initial (56-53) put spread purchase) to fully hedge our total position.