index hedging levels

have been reviewing holdings of investors and they’ll often have put options of SPY for example. question for folks with HF experience: what are the different ways funds forecast that index’s price level in the future such that they feel comfortable with the put’s price level? for example you can forecast s&p’s earnings and hold the multiple constant but that seems quite simplistic. just trying to understand the analytical process you’ve heard of funds going through to make this decision specifically on the appropriate price level. thank you!

 

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