Generally partial, but it depends on some factors.At least...

Generally partial, but it depends on some factors.

At least initially I will do something like:

1. Buy an at the money or thereabouts put; and
2. Sell 2x out of the money puts

It generally costs little to put this trade in place.

Currently on FMG I have purchased $21's and 2x sold $19's. From there, anything can happen, if the stock finishes around $20 I might roll the $21 put out (generally cheap to do once a put is in the money) and maybe sell a 1x $18 or 2 X $17 to finance the roll etc to obtain more downside protection etc.

The "factor" I need to consider is I am naked a sold out of the money $19 put and I need to be prepared to buy stock at that level, if I am happy to do so I may "protect" the whole lot between $21 and $19 and risk having to double my holding at $19 or a partial amount instead. Usually even in that scenario I don't end up buying the stock but just keep rolling the sold out down until it eventually disappears.

Another approach in which I might protect the entire amount is to place a synthetic short (~$0 cost) and buy 2x out of the money calls IF it is cheap to do so (generally not cheap on FMG, but generally very, very cheap on the XJO). That way if the stock goes down I have the protection without having the risk of acquiring more stock, but if the stock takes off my loss on the synthetic short is capped and I actually have additional exposure to partially offset the loss.

As you know there's endless ways to skin a cat with options.