vrudny, I think it’s a sound strategy. I think it’s sound because I’ve been thinking about doing the same myself 🙂
Judging purely from PEs, nasdaq is also the most expensive compared to SP500 & DJI so naturally I expect it to fall the hardest … that is assuming an upcoming recession and the market is going down blah blah blah.
My current plan is to first determine the maximum loss I’m willing to take then spread the amount across PUT options for all three indices. I haven’t looked very closely but I prefer in-the-money options so in case I’m wrong I may be able to salvage something at the end.
I’m also looking to supplement this strategy with a number of stocks, particularly those related to consumption and finance/banking. Personally I think I might have missed the boat on property and builders.
Having said the above, timing-wise I’m still undecided. You might have been following threads in this blog about the market bounce in a mid-election year which we’re in now. I suspect it might even have started and we’re in the middle of it. I think I may just wait until after the fall before I execute this.
