Hedge simulator
Build a hedge from puts and calls and see how it changes a portfolio's path through a bad year. Use the stress test to shape the year yourself, or replay a real one.
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Reading the charts
The top chart follows the portfolio through the year. Green shading shows where the hedge helped; red shading shows where its cost held the portfolio back. The second chart shows the result at the end of the year for every possible market move, with your scenario marked.
How it is modeled
Each hedge is a set of one-year options bought or sold at the start. Prices come from the Black-Scholes model with a skew adjustment. In the replay, volatility each day comes from the VIX or VXN, and the market is SPY or QQQ with dividends reinvested.
Hypothetical and illustrative only. Simulator and chart results are modeled, not actual trades or client results, and are not a prediction or a recommendation. Disclosures