Andrewmc wrote:
I have read of such things but how exactly would one do it?
Secondly, it currently trades at 1.30, if it went to 1.5, I know roughly what that is worth to me, call it 1000 pounds
Let's say my salary was 10k, what do I do? The whole salary, the difference? What would it cost me?
(reading adaptive markets by Lo)
You'd have to do the whole salary to offset the whole amount of risk.
Boilerplate not providing advice there are three options after my revised thoughts.
Buy a future for whenever (or as close as possible) the employment contract expires. This is the simplest way to do it. Almost idiot proof.
Do a collar in the futures market. Buy a 135 call sell a 125 put for around even. You have some float but know your range.
Buy a call in the futures market. This hedges you and is almost idiot proof but also most likely to piss money away.
Personally I'd do a collar. You, I'd consider the future or the collar.
Also you have to investigate tax implications and remeber retail gets fucked on commissions