Options, Volatility & Defensive Strategies

Options, volatility and defensive strategies use derivatives or risk-management techniques to reshape the return profile of a portfolio. Funds may seek option premium income, exposure to changes in implied or realised volatility, downside mitigation, tail-risk protection or more stable participation in equity markets. Their returns can be driven by option premia, volatility risk premia, market direction, the path of prices and the cost of maintaining protection. Implementation differs materially across funds: some systematically sell options, some own convex protection, and others combine defensive equity exposure with overlays. Strike selection, maturity, rebalance frequency, collateral management and risk limits all influence how a strategy behaves in calm, falling and rapidly recovering markets.

Includes: Option Income · Volatility Strategies · Tail Risk · Defensive Equity