A multiperiod option purchase strategy that seeks to avoid large losses in any single investment period by committing 10% of portfolio assets to the purchase of options (long calls and long puts) and investing the balance of the portfolio in fixed-income securities (e.g. Treasury securities). The percentage cut may vary in practice according to different considerations (80:20, 70:30, etc).
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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