Yesterday’s beginning of our “short cover rally” was literally followed by a HUGE amount of selling calls and buying puts across indexes and individual equities. It seems no one thought the Gamma Squeeze Short Cover set to expire on June 30th was substantial enough to help us run higher with any strength.
So if you took hedges off in the nice green day yesterday, feel free to put hedges back on.
This down move might also not be smooth moving, so if you know how to use spreads (debit spreads or credit spreads) this is the time to start learning to combine your options knowledge by pairing strategies. Long Puts with Call Credit spreads, or Short Calls with Long Put Debit Spreads, or for those that were on the call yesterday you might even start trying to use back ratio spreads.