Protecting Your Gains Without Selling: How to Hedge a Tech Portfolio with Options

Author: Koen Hoorelbeke, Investment and Options Strategist

Date: June 19, 2026

Overview

This article discusses strategies for hedging a tech portfolio, specifically focusing on a fictional investor named Thomas who holds a USD 250,000 concentrated tech portfolio. With significant unrealized gains and macroeconomic uncertainties, Thomas seeks to protect his investments without selling, which could trigger capital gains taxes and re-entry risks. The article outlines three practical hedging approaches using options: the protective put, the collar, and the portfolio-level index hedge.

Hedging Approaches

1. Protective Put

The protective put is a straightforward strategy where Thomas buys a put option, giving him the right to sell his shares at a specified price (strike price) before expiration. This strategy provides downside protection if the stock price falls below the strike price.

• Example: For NVDA, with a current price of USD 209, Thomas considers a September 190 put option.
• Cost: Approximately USD 1,900 for 200 shares.
• Maximum Loss: Capped below USD 190, with a breakeven at approximately USD 195.50.

2. Collar

The collar strategy involves buying a protective put while simultaneously selling a covered call at a higher strike price. This approach reduces the cost of the hedge and can even generate a net credit.

• Example: Selling a 225 call while buying a 190 put results in a credit of approximately USD 730.
• Downside Protection: Below USD 190.
• Upside Cap: Capped at USD 225.

3. Portfolio-Level Hedge

Instead of hedging each position individually, Thomas considers using a single QQQ put option to cover his entire portfolio, which has a high correlation with the QQQ ETF.

• Example: Buying a bear put spread on QQQ with a net debit of approximately USD 2,049 for three contracts.
• Protection Range: Between USD 700 and USD 670.

Conclusion

Each hedging approach has its trade-offs between cost, simplicity, and coverage. The protective put offers maximum flexibility, the collar provides a cost-effective solution with capped upside, and the portfolio-level hedge simplifies execution for a correlated portfolio. Investors should consider their unique financial situations and risk tolerances when choosing a strategy.

Final Thoughts

Options do not eliminate risk but redistribute it. The article emphasizes the importance of managing these positions actively rather than setting and forgetting them. Investors are encouraged to monitor their hedges and adjust as market conditions change.