Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Futures & Options, Premium

Optionalysis: Using Standard Deviations to Build Strategies Targeting 2% to 3% per month

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.

Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial