Indexing and Options, and The Value Of Stock Market Research

A few readers wanted to know more about how to manage a buy and hold indexing portfolio with some option trading. I wrote a post about The Reverse Dispersion Equity Collar about a year ago which is a complicated example. Note that if your portfolio is not large enough to accommodate holding 100 shares of each of the TSX60 companies as noted in the example, you could also just buy a longer put on, say XIC (the iShare that tracks the S&P/TSX Capped Composite Index) and write monthly calls. You won’t get the reverse dispersion benefit, but you can still reduce the cost of the collar, and perhaps run a net credit. Whenever I talk options, I always note that required reading is Mark Wolfinger’s book: The Rookie’s Guide To Options.

The Value Of Stock Market Research

Also of note today, is that Thicken My Wallet is running another of his Insider Series Conversations. This time, he interviewed myself as well as Brad from Triaging My Way To Success and we are discussing some of the aspects of stock market research.  Part I is up and live and you can read it by clicking here, and Part II appears tomorrow (which may be today by the time you are reading this…).

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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Showing 5 comments
  • Thicken My Wallet

    Thanks for providing some great information as usual.

  • Nurseb911

    It was a great conversation between the three of us for TMW’s “The Value Of Stock Market Research”. Preet I think taught both of us during the process a thing or two from the other side of the trading desk.

  • Susan

    I enjoyed reading this 3-way conversation very much! I especially liked your comment:
    “Research reports serve to narrow the range in which we guess” -very well put, and something I try to keep in mind always when reading reports from the banks and brokerages.

  • Preet

    @ Susan – thank you for the kind note! Cheers!

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