Hey, it’s Brandon. 

Here's something that confuses most traders: taking a bearish trade doesn't make you bearish on the market.

In Ghost Prints, we take bullish and bearish trades because we're not trying to predict the market - we're trying to manage a portfolio. And right now, our bullish trades suck, but that doesn't mean we've gone full bear.

The "Switching Horses" Strategy

I've been trying to get out of an IWM long put vertical spread since October 15th. Finally today we filled at 70%. But I was hoping to get out of IWM on the day I got into Bank of America - I was just switching horses.

IWM's horse could easily be out of gas after running so many miles off the highs. So I found a new horse when I saw 6,000-7,000 put contracts being bought in Bank of America. 

When we break away, we create a gamma squeeze to the downside.

Here's what most people don't understand: our delta is now 27. We started at 145 delta. That means we're over 80% hedged with very low delta exposure.

That's not being bearish. That's being systematic.

Why This Works Now

The volatility markets are pricing in two outcomes: we inch our way up to a new high, or we see bigger downside potential. Right now the downside is making the most money because that's where the volatility is occurring.

Look at semiconductors - we're seeing institutional bearish activity in AMD, TSM, TSEM. But that doesn't make me bearish on tech overall.

The Bottom Line

If you have long stock, adding bearish trades doesn't matter. You don't need negative portfolio delta to be smart about risk management.

All I'm suggesting is pairing back bullish exposure. The volatility markets say the down could be big, the up is small. That's what matters in portfolio management.

Does that make sense?

Stay Sharp,

Brandon Chapman