Ben Eifert
speaker
517 appearances
1 recordings
1 series
first heard Feb 2025
last heard Feb 2025
Ben Eifert’s voice in public audio — every appearance, attributed to the second.
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Appearances
Market goes up a percent, you make a percent.
If you trade a typical put spread caller against that, you buy a put spread, you sell a call, you're gonna probably gonna take that one.
Sorry,
A put spread would be you buy, say, the at the money put, but then you sell a ten percent out of the money put.
Okay.
So that's gonna give you protection only for ten percent.
Got
And so if you do that kind of a trade, you might take your one delta option down to like a point six, down to a sixty delta.
So now you're only participating kind of sixty percent in the movements of the market.
And if you look at how these kind of trades perform over long periods of time, they actually act a whole lot just like having sort of sixty percent as much stock.
Right.
That because ultimately they're rolling these it's not really like a buy and hold to maturity thing.
It's like they're rolling these options to kind of maintain this kind of exposure.
And if you were just to take the counterfactual, which is why don't I just own sixty percent as much stock and put forty percent of the rest in T bills?
Turns out your fees are way less and your performance is probably better, right?
So you're doing a this creative smart sounding options thing, but actually you're underperforming.
So th there are cases when that's to some extent true with at least with some kinds of derivative structures.
So you will have cases where there's like a big disbursement that has to be made at some future date and they wanna lock in for sure the fact that they can make that disbursement.
But usually something more like an outright put is gonna be a better match for that, right?
Because the thing about the put spread or the put spread caller is you've only got like this, say ten percent buffer of protection.
Showing 101–120 of 517 · page 6 of 26
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