Unit 6 · Level 4 · Portfolio & Hedging
Hedging the book
You've met the hedging instruments: protective puts (League 4 options), perp shorts vs spot (perps unit), and the humble hedge of just holding cash. Portfolio hedging asks one question before scary periods: 'how much drawdown can this book (and this human) actually tolerate?' Then it buys down the excess.
Free to play. No ads, no token, no account needed to start.
What you get asked
Match the hedge to its character
Four tools, one dial: how much of the storm do you want to feel? None is free; insurance never is.
Why is 'hedge everything always' NOT the answer?
Insurance is worth buying only sometimes. A fully-hedged book is an expensive savings account. Hedging is situational: event risk, stretched valuations, or when drawdown would break the human.
The cheapest hedge in every market, forever, is simply position ___.
Small enough positions never need rescue. Every elaborate hedge is partly an apology for oversizing.
Fed week + your book is maximally risk-on + you can't stomach a 15% drawdown right now. The mature play:
Align the book with the stomach, then let the week happen. The book must fit the human. A technically optimal portfolio the owner abandons in panic is worse than a modest one they can hold.
League 4's closing thought: what did every unit (leverage, options, perps, on-chain, macro, portfolio) have in common?
Advanced trading is old rules holding against bigger forces. The graduation boss awaits. 🐜
The rest of this unit
Core-satellite construction, rebalancing, insurance, and the League 4 graduation.