Another way to think of it is that you are taking one bucket of money that you're parking and making a bet against stocks, or even asset values in general.
You can consider your return for that part of your portfolio the inverse of the market performance. Ex: stocks drop 30% and you buy in at that point, then that is the practical return for that bucket for the year.
-When you tax and spend, you are redistributing, but the final quantity is the same.
-When you tax but don't spend, you are reducing demand in the economy by making worse the people with money.
-When you don't tax and don't spend in public services (austerity), you are reducing demand in the economy by making worse the people without money.
That should explain the Republican position.
Anyway, there are different "kinds" of money, and only one "kind" is reduced or created that way.
I guess the argument on the merits of redistribution is the fundamental difference b/w democrats and republicans.
US Treasury != US Federal Reserve
If you give the Federal Reserve a dollar it ceases to exist. If you give the Treasury a dollar it will go out and spend it on something, the dollar will continue to exist. Taxes go to the Treasury.
Or were you referring to selling put options?
Selling put options is a bet that the put options will expire worthless, which is a bet that stocks will continue to go up/not fall.
I honestly believe the insurance analogy for options is misleading. The value of an option is quite literally the difference in value between selling the stock at market price and at the option strike. As a stockholder you don't save yourself as much from buying put options regularly as you would from say getting a surgery covered with health insurance.
Figure out from fundamental what you think is a decent value for the stocks in question, then write puts for that strike price.
I mostly play long cycles in the equity market instead of trading. When I do trade equities, I play one or two stocks that I know their behavior intimately. My very active trading is mostly in futures and currencies.
Having said all that, I'm an indexer at heart, and working for Bloomberg I'm not even allowed to trade the more interesting stuff.
Complain about Bitcoin and their ilk, but they could (in theory at least) offer some protections against stock market crashes and/or high USD inflation.
The simple fact that people like GP exist, and that there have been enough of them to propel the market cap of BTC et al. to billions, suggests that people like GP will continue to exist if the economy crashes.
In fact, if the economy were to crash, it would only take a handful of high volume BTC purchases, I'd bet, to cause another spike in price as people see an opportunity to shelter their finances.
Yes, it is high risk, but you're not just throwing away your money. BTC is much like gold in this manner - to the lay person, there is little value in the commodities other than as a store of value, which becomes more and more appealing as price continues to rise. Look at gold. Markets do not always appear to be rational.
Treasury bills. 4 week T-bills are at 1% yield now, up 10x from two years ago [0].