- Wealth PMS
You can use options for many things, and usually we think of options as highly leveraged plays to trade with extreme volatility. Options, however, have many facets, and if you're comfortable deploying higher capital to write options, you can actually trade with reduced volatility. There's multiple uses of options:
• As a leveraged position through only long options (we do this at Options with AP and with MA20 for instance)
• As a hedge - to protect a portfolio from downside
• As an income generating strategy, playing probability numbers - through writing straddles or strangles, or spreads
It's the third piece we will explore today: How can you generate income while keeping risk at bay? We'll study the use of Standard Deviations to build strategies that generate between 2% and 3% a month, with lesser need of constant monitoring.