Options for Risk-Free Portfolios

Options for Risk-Free Portfolios

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An advanced strategic approach using options to reduce market risks while augmenting dividend income, Options for Risk Free Portfolios moves beyond the basics of stocks and options. It shows how the three major segments (stocks, dividends, and options) are drawn together into a single and effective strategy to maximize income while eliminating market risk. The concept is that by rolling into stock positions right before ex-date by opening a collar, and then closing out or exercising right afterwards, the stock's stated dividend rate is annualized at 300% of the stated annual yield (for example, three stocks each yielding a 4% quarterly dividend yield 12% per year because dividends are earned monthly instead of quarterly). At the same time, downside risk is eliminated with the long put, and that put is paid for with the income from the short call.The degree of historical risk, expressed as market risk and price volatility, isat thecoreof whethera covered call strategy ... Atrader whoself defines as a€œ conservativea€ but whoisnot concerned withthe underlying securitya#39;s marketrisk, violates theanbsp;...

Title:Options for Risk-Free Portfolios
Author:Michael C. Thomsett
Publisher:Palgrave Macmillan - 2013-04-02


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