Your clients might consider buying calls on some of the beaten-down sectors; if stability returns, they could do well
The price of an option hinges on an assumption of volatility, which measures how much the stock price is expected to vary from its current price — a position that is most clearly defined in the cost of an options straddle.
The approach used by these funds restrict the portfolio manager’s ability to use other active or alpha-generating approaches
You like the market’s potential.
Overwriting keeps the bulk of a portfolio intact while the client enjoys an enhanced income stream
The covered combination is an enhanced dollar-cost averaging strategy in which clients invest at periodic intervals
This strategy offers limited risk with the appearance of sitting on the sidelines
Taking advantage of mathematical certainties and the volatility term structure
What makes this approach worth looking at is the certainty of time-value erosion. As the option approaches expiry, time value decreases
Volatility trading strategies can be expensive, but there are cost-effective ways to use them as a hedge in a traditional portfolio