You want to hedge against your stock portfolio value declining more than 8% next month. Currently, the S&P 500 is standing at 2,000 and your portfolio has a beta of 0.8. To achieve this goal, the best strategy is protective put using S&P 500 index put option. In other words, you need to buy S&P 500 put options but there are many different exercise prices to choose from.
Find the right exercise price for S&P 500 put option.