🔴Expensive Market: - Less sold puts - Less LEAP calls - Less high beta exposure - More bonds
🟢Cheap market: - More sold puts - More LEAP calls - More high beta exposure - Less bonds
Of course there is more to the market than just expensive or cheap. The entire macro/economic thesis matters A LOT!
Unfortunately, most retail investors actually allocate the opposite of what I just said above simply cause they FOMO when things are going up & panic when things are going down.
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How I Always "Keep My Ratios In Check"
🔴Expensive Market:
- Less sold puts
- Less LEAP calls
- Less high beta exposure
- More bonds
🟢Cheap market:
- More sold puts
- More LEAP calls
- More high beta exposure
- Less bonds
Of course there is more to the market than just expensive or cheap. The entire macro/economic thesis matters A LOT!
Unfortunately, most retail investors actually allocate the opposite of what I just said above simply cause they FOMO when things are going up & panic when things are going down.