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Trying to understand hedging
I see youtubers recommending hedging of stock positions by selling calls or buying puts, but i feel like it doesnt make a lot of sense to me as a small trader as i can enter and exit positions without much fuss. E.g. this youtuber owns a few hundred tsla shares that he is holding for the long term and sells calls on a weekly basis. I have a few problems with this approach. 1) if he is holding for the long term, why would he risk his shares getting called away? 2) if he is selling calls at resistance, why would he not just take some profits? Again it seems like using options as hedges only seems sensible if i am holding like thousands of shares with low float. Am i missing something here? Edit: no capital gains tax. I am not American nor is this youtuber. It might make sense to hedge using options if i have to pay taxes on my realised profits.4
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