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You can short without tail risk, e.g. buying puts.

• dist-epoch 2y ago
  A put is not a short replacement. Buying puts is more about longing volatility.
  • fooker 2y ago
    You can simulate a short with multiple options. https://www.optionseducation.org/strategies/all-strategies/synthetic-short-stock https://www.optionseducation.org/strategies/all-strategies/s... This is not quite all the way there, but close enough. Basically, you do something analogous to 1 = 1/2 + 1/4 + 1/8 + ...
  • jgalt212 2y ago
    In theory, yes. But when you include hedging costs and taxes, the link becomes less direct. The cleanest way to get long volatility is by purchasing ATM straddles. https://www.investopedia.com/terms/s/straddle.asp https://www.investopedia.com/terms/s/straddle.asp
  • fny 2y ago
    No. A long strangle is a way to long volatility. With a put, you primarily pay for directionality with hedged upside risk: you don't lose your house if the stock moons. While it's true volatility is a component, that's a side effect of the hedging since your counter party takes on volatility risk.