Managing Market Risk through Hedging Strategies

John is managing a portfolio that has a significant allocation in equities. Recently, he has observed heightened market volatility and is concerned about the impact of potential downturns on his portfolio’s performance. To mitigate market risk, John is considering various strategies. He is particularly aware of the fact that some strategies can be effective in reducing the downside risk but might also limit upside potential.

He reviews three strategies that he could potentially implement: