| | | | July 18, 2025
Let’s say you’ve got three solid setups in your portfolio.
Maybe you tuned into yesterday’s Profit Panel and heard some great trade ideas.
Maybe you followed Jack into HOOD, jumped into Unity with Alex, and added a nuclear play like SMR for good measure.
You’ve done your research. You like your entries.
Now here’s the real question: What happens if the market tanks next week?
Well, Kane Shieh recently laid out something most retail traders skip — not because it’s hard, but because they don’t think they need it.
Hedging.
More specifically, tail risk hedging — where you put a small amount of capital into a position that explodes if the market moves violently against you.
Kane broke it down with one of his favorite tools: VIX options.
“Your expectation is that you’re going to lose money on your hedge… but if it goes really against me, I want it to really protect me.”
That mindset — accepting a small, planned loss in exchange for big protection — is what separates professionals from amateurs.
Kane even walked through how to calculate strike prices and hedge size based on portfolio exposure, and why the cost is worth it if you're managing risk like a pro.
| | • | | First, he asked: “What kind of hit are you trying to protect against — a 5% drop? 10%?” |
| | • | | Then, he looked at how VIX typically reacts during a pullback of that size — and used that to pick a strike. |
| | • | | For example, if a 5% S&P drop tends to send VIX to 25, he might buy the 20 strike call a month out. |
| | • | | Then he’d ask: “How many contracts do I need to offset a $5,000 drawdown — assuming this VIX call goes up 200%?” |
It’s not about being perfect. It’s about doing just enough to soften the blow if things go sideways.
Because the truth is: your long positions only make money if you’re right. But a good hedge pays off when you’re wrong — and keeps you in the game.
To your prosperity,
The ProsperityPub Team
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