Strategy Comparison

Owl

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Capital Protection

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Low

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Treasury bills, long call spreads

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Annually

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Low Risk

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100 Shares

Objective

Defensive positioning with defined risk overlay to hedge or participate. High levels of capital protection with potential for additional income. A clearly defined way to participate in the market while preserving capital. 

Use Cases

  • Down payments

  • Home improvements

  • College tuition

  • Funding a sabbatical

  • Career transitions

Further Reading

Owl

Advanced Guide to Structured Products

by Structured Retail Products

Understanding Structured Products

by Nathalie Osphare-Druilhe, BNP

 

Condor

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Yield Enhancement

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Moderate

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Short Call/Put Spreads; Long Treasuries

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Monthly

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Moderate Risk

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$25,000

Objective

Premium collection from defined risk credit options positions. Complement equity holdings with negatively correlated strategies that perform in sideways markets.  

Use Cases

  • Yield generation 

  • Portfolio diversification

  • Volatility capture in relatively high volatility targets

Further Reading

Owl

Condor Index: CNDR

by CBOE Global Markets

Iron Condor Spread Strategies

by Jared Woodard

 

Seagull

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Market Participation

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Moderate

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Long Put Spreads, Short Calls, Long Equity

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Quarterly

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Moderate Risk

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100 Shares

Objective

Participate in equity market growth, with a downside buffer that is paid for by limiting upside. Gain market exposure while reducing volatility and preserving portfolio value. 

Use Cases

  • Equity portfolio allocation

  • Overlay on company stock or RSUs

  • Long term investments with moderated risk profile

  • Replacement for low volatiltiy strategies like dividend or min vol trackers. 

Further Reading

Owl

Hedged Equity

by JP Morgan

Using Options to Hedge Equity Portfolios

by Kenneth Everding, Parametric

 

Falcon

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Leverage

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High

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Long Calls, Short Puts, Long Equity

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Weekly

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High Risk

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100 Shares

Objective

Equity replication strategy to capture skew premium and enhance market returns. This enhanced market exposure mimics long equity but captures additional volatility premium with options leverage. 

Use Cases

  • Aggressive positioning with capital leverage

  • Long term allocations to indices

  • Combination short volatility, long equity strategy

Further Reading

Owl

The Risk Reversal Premium

by Euan Sinclair and Blair Hull

Downside Variance Risk Premium

by Bruno Feunou, Mohammad R. Jahan-Parval, Cédric Okou

The Skew Risk Premium in the Equity Index Market

by Roman Kozhan, Anthony Neuberger, and Paul Schneider

 

Heron

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Market Participation

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High

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Long Puts, Short Calls, Long Equity

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Weekly

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Moderate to High

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100 Shares

Objective

Downside buffer with dynamic interim caps to reduce cost and increase participation.  Protection is paid for with installments of call sales.  Dynamic rebalancing to optimize costs and option decay. 

Use Cases

  • Protected equity exposure in indices or individual stocks

  • Overlay to concentrated positions

  • Capture volatility in growth stocks with minimized downside

Further Reading

Effective Downside Risk Management

by Schroder Fund Advisors LLC

Trading Volatility

by Colin Bennett