OptionAU Strategy
Although the OptionsAU business was built as a neutral educational resource for traders, it's only fair to showcase our own options trading style to be available. Simply, our team look to be net premium sellers of options in line with quality equity positions to construct our portfolio. This does not mean this is what you should do, as there are many great strategies that can show success; further details below.
Goal: Compound wealth over the long term. Our approach combines a core holding of high-quality equities in long-term macro trends with the disciplined use of strategic options trading. By strategically selling options, we generate additional income from our equity positions and create portfolio diversification with efficency.
Integrating equities and derivatives allows us to enhance risk-adjusted returns, maintain flexibility in our market exposure, and capitalize on market sentiment and volatility.
Core Portfolio Trades
Covered Strangles
Selling expensive Options Premium (Calls & Puts) is the foundation to our strategy, seeking elevated Implied Volatility and Theta (time decay), whilst generally remaining bullish. Often labelled "The Wheel"
Ratio Spreads
Full of flexibility, the ratio spread creates strong risk-adjusted returns into the portfolio and cheap outlier protection. We also use a version of the ratio over the Index to create a zero cost 5% protection over the XJO.
Diagonal Spreads
Another versatile tool to hedge Vega within the portfolio and trade with Implied Volatility is low. We use a mix between the traditional diagonal, the calendar and skewed diagonals to adjust our opportunity levels.
If you're interested in learning more, please contact us at info@optionsau.com or go to our contact page.