“The option premium received acts as a partial cushion to downside movements in the market and helps provide more consistent returns to investors, especially in more volatile times. In the current volatile market, investors can generate 20% annualised income by selling call options on a portfolio of shares. The greater the share market volatility, the greater the option premium received and hence, the greater the buffer to downside movements in the market.”
Quote Senior Portfolio Manager, Macquarie Equity Income Fund.
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