And if the puts were not cash-secured, the return would be significantly higher. ETFdb.com’s proprietary ETF Screener allows users to filter and screen all ETFs based on customized parameters. How About Cash Royalties. Portfolio Diversification Isn't Dead, It Was Just Sleeping, +$1,213 (+7.6%) vs. non-option +$1,500 (+9.4%), -$287 (1.8%) vs. non-option -$ 1,500 (9.4%). Welcome to ETFdb.com. And in this case, that would be the $2,800. ESG Investing is the consideration of environmental, social and governance factors alongside financial factors in the investment decision–making process. Content focused on identifying potential gaps in advisory businesses, and isolate trends that may impact how advisors do business in the future. Investors could profit, however, with a put option strategy tied to the SPDR S&P 500 exchange-traded fund (ticker: SPY). I do not consider any spreads that expire more than 45 days out, and I make sure the credit received is at least $0.18. Here’s the payoff option diagram showing the dynamics of the position: Protective puts are ideal for investors concerned about a potential pullback in the market, but are not so concerned that they’re willing liquidate their position. With this information about how the SPY moves I was able to form my thesis and start backtesting. Daily Chart. Want to see this in-action? A simple baseline strategy serves two very important functions: it confirms whether your strategy is effective and serves as a benchmark you can use later when optimizing your strategy with additional, more sophisticated signals. Those who are long-term bearish may want to instead sell the stock and consider alternative investments. Because it’s just like Covered Calls, but WITHOUT the big capital requirements. Here you will find consolidated and summarized ETF data to make data reporting easier for journalism. We like to explore, educate, and share ideas involving options trading. “What’s the #1 way to trade today?” That question is in my inbox every single week. Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead? Why Buy When You Can Rent Stocks . Options Cafe is a Cloudmanic Labs company, © 2018. Insights and analysis on various equity focused ETF sectors. But even backtesting offered little hope of success until I discovered my baseline strategy. I look for 2 dollars-wide SPY spreads that are at least 4% from the current stock price. Get our latest news delivered to your inbox. Sign up for ETFdb.com Advisor Alerts now! Before I get started, I wanted to remind you that I’m focusing this week and next entirely on put-selling. All rights reserved. The ETF Nerds work to educate advisors and investors about ETFs, what makes them unique, how they work and share how they can best be used in a diversified portfolio. Exchange-traded funds (ETFs) provide investors with a great way to invest like the professionals in everything from the obvious to the obscure. Right now, this Selling Puts strategy is crushing the market.