FOMC&Quadruple Witching Day, how to use option to hedge？

A huge swing week, Chinese stocks were bloodied. Although many Chinese stocks have fallen out of the value for long-term investment. But to individual investors, value investment is so-called risky.

$SBERBANK(SBER.UK)$ was almost cleared on the London Stock Exchange, and its share price fell as low as only $1 cent, finally withdrawing from LSE. When the stock price fell to around $3 on February 23rd, there were a lot of people buy in, and then it fell to $1 and then 1 cent.​

Is SBER worthless? Of course not, but the share price has completely separated from the value level, so don't discuss whether oversold is worth to buy from value level. Of course, if you have enough money, you can buy and hold. At present, I don't have any Chinese stocks.

The U.S. stock market did not perform well this week. The S&P index fell by 1.3% while the Nasdaq was miserable, it fell 3.5%.

I don't think it is meaningful to analyze the market now. Next week is a very critical week. There will be the first interest rate hike by the Federal Reserve and the first quadruple witching day 2022. The uncertainty is too high, and everything depends on next week.

Back to the market, the S&P index has not reached the upper trend line in the past two rebounds, which shows that it is very weak, but it has not fallen below the lowest point, indicating that the market is waiting to consolidate.

We see that the 50-day line and the 200-day line are likely to close next week, and there will be a dead cross. I am not a shorter, I hope the market can be a strong rebound next week, but now I can't judge from the chart.

When the S&P index be on the right track? I think it is crucial to return to the 200-day line, that is, the position around 4467, and now it is a short trend. If the lowest point breaks again, it is a high probability to break $4000.​

I still hold Apple, few Tesla and Blizzard shares, and I will open a SPY put next week to hedge my positions. For this reason, I looked at SPY options. The position of put options due next week are amazing, Let me draw the difference between puts and calls.Obviously, the following charts show that there are a large number of put positions. This volume will inevitably have a long-short war next week, either bulls will force short, or see you at 4000?​

​$Activision Blizzard(ATVI)$ My positions have been fluctuating steadily in the range of $80-81, so I won't talk about it. I will keep doing sell put and sell covered call with reference to past operations.

Talk about my Apple and Tesla. I bought Apple at $155, and this week it fell near the 200-day line again. I hold Apple sell put option at strike of 150 due next week. If it is exercised next week, I will buy Apple at $150 as planned. With the relief of the supply chain, I am still optimistic about Apple, even in a bear market.​

However, $Tesla Motors(TSLA)$  has always been the representative of growth stocks, and its volatility is large. If the S&P index really go below $4000, we will see $600 of Tesla undoubtedly.

Tesla closed below the 50-week line this week, which is also a bad sign. Tesla did not fall below the 50-week line when it retreated at its maximum last year. I don't have much position in Tesla, so I will take it and wait for the opportunity to raise my position, and keep making sell covered call to earn some royalties.​Finally, VIX closed at around 30 this week. What is interesting is that the Nasdaq fell by 3.5% in a week, but the VIX also fell by 3.85% in a week. Volatility fell together with the market, indicating that the market did not panic, perhaps it was just a normal defensive adjustment before major events.​It can be guessed that VIX has repeated and short-term call vix correlation before the Fed meeting$Barclays iPath Series B S&P 500 VIX Short-Term Futures(VXX)$. It is also a hedging method. Explain that the most direct correlation etf of vix is$ProShares VIX Short-Term Futures ETF(VIXY)$. However, its option activity is far less than that of VXX, so it is more appropriate to trade VXX in options. If you look at the option changes, the call and put of VXX will be very active next week.

Some people may ask why they don't choose VIX index option. VIX index option is CBOE option, and the delivery time next week is next Wednesday, March 15th, so there is no way to cross the Fed meeting.

That's all for this week. Let's witness the market next week!