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Market participants are taking on a 'this is as good as it gets' mentality, and it may be time to think about hedging your portfolio against broader market risks
The writing of the call option provides extra income for an investor who is willing to forego some upside potential. The BXM Index is designed to show the hypothetical performance of a strategy in which an investor buys a portfolio of the S&P 500 stocks, and also sells (or writes) covered call options on the S&P 500 Index.
In finance, a collar is an option strategy that limits the range of possible positive or negative returns on an underlying to a specific range. A collar strategy is used as one of the ways to hedge against possible losses and it represents long put options financed with short call options. [1]
Although the terminology may take some getting used to, options are just another investing tool for generating income or protecting you from a market sell-off. How Options Can Help Your Portfolio ...
S&P 500 Futures are financial futures which allow an investor to hedge with or speculate on the future value of various components of the S&P 500 Index market index. S&P 500 futures contracts were first introduced by the Chicago Mercantile Exchange in 1982. The CME added the e-mini option in 1997.
Options can be a valuable tool within an advisor’s toolbox, but because of their potential complexity, they require a deep well of knowledge and understanding to navigate successfully.
A call option on a stock index gives you the right to buy the index, and a put option on a stock index gives you the right to sell the index. Options on stock indexes are similar to exchange-traded funds (ETFs), the difference being that ETF values change throughout the day whereas the value on stock index options change at the end of each ...
When it looks like markets are about to fall, some investors look for short-term alternatives to stocks and other traditional long-term investments.
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