How to hedge?

$Coinbase(COIN.US) $Strategy(MSTR.US)

$Tesla(TSLA.US) $Novo Nordisk AS(NVO.US)

How to hedge?

Two methods: UVXY & put

1. Within the first half hour of the market opening, if there's a clear waterfall pattern, wishful thinking might creep in: "Will it bounce back?" Make decisions based on probability. Risk control comes first—even if the price recovers, accept it and hedge with a put. Calculate the hedge ratio using the put's delta, usually holding for a few days and exiting when the pullback seems sufficient.

2. If the entire market shows obvious panic, widespread declines, or the fear index spikes sharply, consider hedging with UVXY, typically exiting the same day. UVXY isn't for making profits—it's hard to time, and the window of opportunity is rare.

These two points help me face extreme market volatility with smaller drawdowns, keeping my mindset steadier and less prone to breaking down, avoiding impulsive trades.

Practical applications:

1. During MSTR's extreme volatility, dropping from 543 to around 300—a full 50% pullback—I gradually reduced positions to lock in floating profits and even made some gains from MSTR.

2. During TSLA's drop from 488 to around 420 (about 15%), I avoided losses so far (though the future is uncertain).

It might sound like bragging, but a review confirms it. Luck was definitely a factor, but so was risk control through hedging, avoiding wishful thinking.