Hedging Against The French Election

Speaking on Bloomberg Markets, Pravit Chintawongvanich of Macro Risk Advisors explained how to hedge the French election risk.

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He would sell the April 21, 237-strike put in SPDR S&P 500 ETF Trust SPY for $2.34 and buy the May 19, 237-strike put for $3.84. The strategy would cost him $1.50 and if the stock stays above $237 at the April expiration, the April 237 put is going to expire worthless and he is going to have protection below $235.50 until the May expiration.