AGGRESSIVE STRATEGIES

Aggressive Strategies with Purchase Options (Calls) allow you to optimize yields in the bullish phases of the Market.

It is also common to use other means, such as:

Increase the percentage of risk assets in your portfolio

Leverage your risk position by taking on debt

Choose higher-risk assets to integrate your portfolio

When we buy calls, we pay a price (called a premium), and that price is all we can lose if the chosen time is wrong.

When to start Aggressive Strategies with Options?

The answer depends on the analysis method you’ve chosen to decide your investments.

You can use technical, fundamental or academic analysis.

In the first two cases, you seek to find «expensive» and «cheap» levels, either in the general market or in certain assets in particular.

So you’ll be aggressive when you identify «cheap» or uptrend assets.

Instead, when you use the academic approach you give up trying to predict the market, and you only adapt to it.

Under this approach, we will be aggressive when our RISK permits.

Our attitude towards risk allows us to do so when the risk expected by the market decreases (measured by implied volatility).

Implied Volatility: VIX – VXN, analyzed here

In addition, we can be aggressive when our risk capacity  increases.

This occurs when our previous yields have been positive, and we can risk some of our profits.

You may be interested in the following items:

What is Algorithmic Trading?

Defensive Strategies

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