This video is about how to hedge your portfolio during a stock market crash, using Tesla stock as an example.
The speaker says that the stock market is down about 2% but their portfolio is up 1.4%. They attribute this to hedging their portfolio with a Tesla put option. A put option gives the holder the right, but not the obligation, to sell a stock at a certain price by a certain time. The speaker chose Tesla because it has a high beta, meaning its stock price tends to fluctuate more than the overall market. Additionally, they reason that a recession would likely lead to decreased vehicle sales, which would hurt Tesla’s stock price.
