Are there mutual funds that trade (or hedge with) options?

Discussion in 'Options' started by crgarcia, Dec 12, 2009.

  1. I'm curious why none, or almost no mutual fund trades or hedges with options?

    Can mutual funds legally trade options?
    Are they banned by regulations?
  2. Mutual funds are a major part of the reason a smile exists...yes, mutual funds hedge with options (and futures, CDS, and other derivs)
  3. heech


    There are also a number of mutual funds (and I believe even ETFs) that implement a covered-call only strategy.
  4. BXM is the SPX buy-write index, but I think it's a theoretical index and not tradeable.

    BEO is a tradeable covered call index, and there are others (FFA, MCN, BEP).

    But just like many other exotic etf/funds, there's going to be inefficiencies strictly due to scalability-- best to do CC's on your own.