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The Future Is a Parabola (and hedges)
- Hans Albrecht
- Aug 13
- 3 min read
Wall Street’s playbook is failing you. The "Smart Money" got out in April and is only recently piling back into markets. But they are still skeptical according to many measures of sentiment and institutional fund leverage. Analysts will have no idea how to value companies with the tidal wave of productivity gains that’s about to hit.
Why? Human nature. Recency bias — ie projecting yesterday's growth forward with little nuance. It's uninspired, and in this case, dangerously wrong. But we don't mind as that's what provides opportunity to those with vision. NVDA at 135 was a head scratcher to me. At $180 it's still cheap. Why?
We are stepping into a world of parabolas. Company A makes the right AI moves, gains exponential advantages, and rewrites its future. Company B? Same industry, same resources… but the wrong AI calls. That difference won’t just dent profits — it could erase the company from existence. There's never been so much at stake. Moats into puddles. CEOs humbled.
As I’ve been saying: our world is being altered drastically. Some will win exponentially. Others will lose catastrophically.
On my public shows over the past months I’ve told you to own names like NVDA, ETHA, HOOD, NBIS, PLTR, CCJ — all of which have crushed it. I’ve also flagged shorts like FVRR, UPWK, ADBE, and CRM — all straight down since on AI's disruptive reality. Not everyone wins.
No prisoners during this phase. And you either see this stuff, or you don’t.
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Now, about those hedges.
Today I want to talk about put spreads:
When markets get choppy, many investors turn to protective puts. But there’s a lower-cost alternative worth knowing: the put spread.
A put spread pairs a long put (your main protection) with a short put at a lower strike. The short put caps your downside protection, but the premium you collect helps offset the cost—sometimes significantly. Institutions like JPMorgan regularly run this structure on a percentage basis (e.g., buying a 95% put and selling an 80% put) to protect large portfolios. Check out my Free JPM Collar Series on YouTube for that.
Why use put spreads?
Cost efficiency – Selling the lower strike can make the hedge far cheaper than an outright put.
Leverage to a move lower – Steep volatility skews make out-of-the-money puts expensive to sell, improving risk-reward and pricing.
Lower decay – The short put’s faster time decay helps offset losses from the long put’s decay.
When to use them:
Put spreads work best for passive hedging—when you want to set protection and revisit it near expiry, not trade around market swings. If you’re trying to capture quick sell-offs, outright puts may work better since spreads are harder to monetize mid-life. This is key and why I teach students that if they want the real-deal, grab the full convexity of a straight-up put. Much better monetization potential.
Risks & trade-offs:
Gains are capped at the short strike.
Big volatility spikes can hurt mark-to-market value due to short skew exposure (you've sold the put that the market is moving into perhaps violently).
In sharp sell-offs followed by quick rebounds, you may not fully realize the spread’s maximum payout.
Bottom line: If your goal is to control hedge costs and you’re comfortable with defined downside limits, put spreads can be a smart, disciplined way to protect your portfolio—without paying top dollar for insurance.
On that note:
I'll be doing a hedging workshop (I did manage millions in downside protect Black Swan funds for years).
Put your hand up if you're interested. This could be the most important session you ever watch. I think the market will melt-up on AI fever but at some point we are going to have a "Houston we have a problem!" moment. But I won't waste my time if I don't get enough people.
It's going to be a Saturday/Sunday and run around $897 ($150 discount for LEAPS and CRYPTO INCOME members). We'll go over ALL of it - pro stuff from an actual pro who has managed crash-protect funds.
Stay nimble,
Hans
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It’s the printing press moment—and we're positioned for it.
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Hans
Head LEAPS Afficionado
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