Hedging SPCX With Nasdaq-100 Puts: A Beta-Adjusted Recipe
For long-only SPCX holders who want broad downside protection without selling stock, NDX puts beta-adjusted to SPCX are the standard hedge.
SPCX vs NDX beta (est.)
~1.6
Annualised hedge cost
~2.2% of notional
Hedge ratio
1.6× NDX notional
Why NDX over single-name puts
Single-name SPCX puts are expensive (IV high) and only hedge SPCX-specific risk. NDX puts are cheaper (IV lower), hedge the broader market move, and are deep and liquid. For long-only SPCX holders worried about macro drawdown rather than company-specific risk, NDX puts beta-adjusted are the right tool.
Beta is estimated from intraday correlation with the Nasdaq-100; early reads suggest SPCX trades with ~1.6 beta to NDX. Hedge ratio is therefore 1.6× notional in NDX puts per dollar of SPCX exposure.
Key takeaways
- NDX puts hedge market risk cheaper than single-name SPCX puts
- Beta-adjust at ~1.6 for the right hedge ratio
- Re-estimate beta monthly — early-IPO correlation is unstable
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