There's a high chance the market will be weak or move sideways in 2026, so the portfolio could see a drawdown.
Proper hedging can give an additional 5 to 8% return when the market is weak.
You can hedge using covered calls, collars, bear credit spreads, etc. For example, covered calls work best near resistance. Selling monthly index options in resistance zones suits a sideways market, while in a weak market collars and ITM covered calls perform the best.
What are your thoughts on this?
That makes sense in a sideways market, but we should be careful with the extra 5-8% claim because the real benefit is smoothing drawdowns and managing tail risk. Covered calls can cap upside quickly, and collars can become pricey if volatility spikes.
Are you using rules‑based entries (like specific levels or IV) or going discretionary? I keep a short pros‑cons list for each hedge here: https://blog.promarkia.com/
Hedging isn't free; there's no magic bullet.