An options trade that pays off if the S&P 500 fails to get back to new highs in the next month

Mike Khouw breaks down how he looks at risk for the market and individual stocks.

The concept of risk-adjusted returns is crucial for investors because it allows for evaluating investment returns relative to the risk taken to achieve that return. I'll review how to look at risk for individual stocks and the overall market. And then I'll provide a hedge for the overall market. Common sense suggests that rational investors would demand higher rates of return to take on greater risk.

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