May 22, 2014

Advisors Option 18: Listener Mail Extravaganza

56 minutes

The Buzz: An overview of the upcoming Options Industry Conference. What topics are discussed at the conference? Who attends? Is there any benefit for advisors?

Listener Mail Extravaganza: The Advisors Options mail bag is filling up, so we are going to tackle as many as possible this episode:

Question from Neal Santos. I am in the market for a new advisor and your program has awakened me to the benefits of using options. What sort of licensing should I look for in an advisor to make sure he is qualified to handle options investments? Is there a specific options exam offered by the exchanges or perhaps OCC that I should look for? Thanks for the show.

Question from J. Andrews, Philadelphia, PA. I have multiple clients with retirement assets in broad based equity portfolios. I have already done the correlation work and calculated how many SPX and SPY puts it would require to both fully and partially hedge the positions. My initial thought is to utilize SPX contracts as the larger size will reduce the number of contracts and reduce the overall commissions. But I have serious concerns regarding slippage in the SPX. I fear that over the long-term the dramatic difference in the bid-ask spread of the two products will result in lower returns for my clients in the SPX. One or two bad fills is all it would take to wipe out several years' worth of commission savings. Are these fears warranted?

Question from Darren. Hi, does OIC have any option alert services? Thanks and I truly enjoy the program.

Question from Andrea Tillwell. I would be interested in crafting a custom overlay to my retirement portfolio. Does Swan offer a bespoke service to individual investors or only to institutions?

Question from Hudson Trader. I am starting a new RIA with a focus on covered calls. What firms do the best job handling options focused funds - tools, understanding, etc?

Question from A_Firm. My clients are pushing for more commodity and volatility exposure in their portfolios. I am comfortable with options but have not traded many futures, so I am looking at ETF options, particularly SLV, GLD, VXX, USO and UNG. What is your view on these products from an options perspective? Do they offer suitable depth and liquidity for clients looking for commodity exposure?

Question from TBard. You have discussed leveraged ETFs in the past but have not touched on structured products. This to me is the more interesting of the two product categories for a busy advisor or asset manager. Many of my peers use fee-based products that replicate protective put strategies. I have several clients in funds linked the BXM and am taking a long look at PUT. Since you've complained about lack of options tools and awareness on the part of major BDs in the past perhaps these products are the necessary half step. The goldilocks porridge of options products for advisors.

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By The Options Insider Radio Network

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