tastytrade Market Measures

Beyond Market Diversification


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The Research Team builds off of Friday's Market Measures and discusses how adding options to even the most diversified all stock portfolio can reduce overall portfolio volatility by another 30%.

This is due to the inherent diversification present in options since their price depends on underlying movement, time, and volatility.

Since outright stocks do not have multiple components making up their price movements, their diversification potential is limited.

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tastytrade Market MeasuresBy tastytrade