Bought OTM puts on IWM early today to add to the pile of SPY puts we own. Nice pop with the IWM puts up about 65% at the close. Have been rolling some of the ITM SPY puts into longer duration OTM puts.
It's definitely nice to have an increasing store of potential dry powder in this decline. It remains to be seen if, in the immortal words of George W. Bush, "This sucker's going down." 
+1. Let the discussion continue on whether it makes sense to hedge or not but it sure feels nice to have no impact on your portfolio when the markets go down 2%+, especially when you are at that time trekking in northern thailand's jungle! :d
It sure feels good when you timed it right... the thing is how often you timed it right. If one has the ability on timing (some do), there is much better way to make money than doing "hedges"
I give him credit. He timed it perfectly and he had a reason...WSBASE...he called it on the way up too.
you are very kind. However, there is a big difference in predicting a major turn in the market and making money on that prediction. Our hedge is tricky. I don't have the guts to in effect go short with TRS as Watsa did because of the huge adverse movement if the market against all reason continues to go up.
We started out in mid January with slightly OTM Feb SPY puts. These waffled back and forth mostly under water until the last few days of Jan. Today, we closed out the last of these with a nice gain. In the meantime, we have been rolling about two thirds of these gains farther out on the volatility curve, buying March and then April SPY and IWM puts that are longer dated and a little bit farther out of the money than the February puts when we first bought them. We also took some $$ off the table so that if the market is sluggish to decline or pops back up, we won't lose money on the hedge.
Now, if the market goes down fast or a lot, the greater volatility exposure will give us an extra kick.
