Wall Street Has a Hot Options Trade for Sideways U.S. Stocks
- Buy-write index beating S&P 500 after trailing since 2016
- Strategy works best in flat markets while guarding against vol
Remain Underweight in Equities, Sarasin & Partners' CIO Says
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There’s an options trade that promises stellar returns if U.S. stocks continue to tread water. The catch: it’s only managed to deliver that a handful of times over the past decade.
Welcome to the forgotten world of buy-writes: an investing style for traders who lack conviction on whether the second-longest bull market on record still has life. It combines long equity exposures with sales of call options to deliver potentially double-digit returns in the event index moves are subdued.