John Burrello, Frank J. Fabozzi, Han Liang, Anil Sood, Kari Vatanen
{"title":"Applications of stock index options for income enhancement","authors":"John Burrello, Frank J. Fabozzi, Han Liang, Anil Sood, Kari Vatanen","doi":"10.1057/s41260-024-00366-z","DOIUrl":null,"url":null,"abstract":"<p>Three real-world applications of derivatives in managing equity portfolios focusing on enhancing income using stock index options are illustrated in this article. Where these strategies are applied, providing practical examples and detailed analyses of their outcomes, is explained. The common pitfalls of option income strategies, particularly the impact of market volatility on yields, and how adjusting strike prices systematically can help achieve more stable income are described. This strategic insight is crucial for portfolio managers looking to enhance their income while managing risk effectively in their equity portfolios.</p>","PeriodicalId":45953,"journal":{"name":"Journal of Asset Management","volume":"1 1","pages":""},"PeriodicalIF":1.5000,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Asset Management","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1057/s41260-024-00366-z","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Three real-world applications of derivatives in managing equity portfolios focusing on enhancing income using stock index options are illustrated in this article. Where these strategies are applied, providing practical examples and detailed analyses of their outcomes, is explained. The common pitfalls of option income strategies, particularly the impact of market volatility on yields, and how adjusting strike prices systematically can help achieve more stable income are described. This strategic insight is crucial for portfolio managers looking to enhance their income while managing risk effectively in their equity portfolios.
期刊介绍:
The Journal of Asset Management covers:new investment strategies, methodologies and techniquesnew products and trading developmentsimportant regulatory and legal developmentsemerging trends in asset managementUnder the guidance of its expert Editors and an eminent international Editorial Board, Journal of Asset Management has developed to provide an international forum for latest thinking, techniques and developments for the Fund Management Industry, from high-growth investment strategies to modelling and managing risk, from active management to index tracking. The Journal has established itself as a key bridge between applied academic research, commercial best practice and regulatory interests, globally.Each issue of Journal of Asset Management publishes detailed, authoritative briefings, analysis, research and reviews by leading experts in the field, to keep subscribers up to date with the latest developments and thinking in asset management.Journal of Asset Management covers:asset allocation hedge fund strategies risk definition and management index tracking performance measurement stock selection investment methodologies and techniques portfolio management and weighting product development and innovation active asset management style analysis strategies to match client profiles time horizons emerging markets alternative investments derivatives and hedging instruments pensions economics