Building a Core Portfolio with Options
Building a core portfolio is an essential part for diversification and staying active in the market. The benefits of building a core portfolio also helps the trader invest in non-correlated underlying, which in essence will mean there should be lower drawdowns and market risk, vrs investing into one product. Our idea is to build a portfolio that will throw off cash that we can then use, to continue to invest. Whilst dividends have their benefit, Options help add to this ability and enhance the returns.
With the core portfolio strategy model we are going to use options. Selling options helps the trader receive additional income and hence reducing the cost basis of each stock we are trading. Every time we reduce the cost basis of the stock purchase it will help us increase our probability of profit for the trade. Whilst selling calls on…