Unlocking the Potential of Defined Outcome ETFs: Investment Strategies for Stability and Growth

Discussion in 'Options' started by ajacobson, Jun 4, 2024.

  1. ajacobson

    ajacobson

    [​IMG]
    Webinar
    Unlocking the Potential of Defined Outcome ETFs: Investment Strategies for Stability and Growth
    Defined outcome ETFs (also known as buffered ETFs) are among the fastest growing segment of the ETF market, with total AUM surging from ~$200M in 2018 to over $50B today (doubling in the past year alone). What are they and how are they structured to give investors the defined outcome? What explains the impressive growth and what’s ahead in terms of trends and themes in this space? Join industry professionals from Cboe®, Innovator, and Old Mission for a live webinar and Q&A session to learn more about defined outcome ETFs.

    Event Details
    Unlocking the Potential of Defined Outcome ETFs: Investment Strategies for Stability and Growth

    Date: Tuesday, June 11, 2024

    Start Time: 8:30 a.m. ET

    Duration: 30 Minutes

    Register Now
    Not Attending
    Advance registration is required for this live event. Registration closes at 4:00pm CT on Monday, June 10. After this time, you will be unable to register for the live event, but you can email kprovost@cboe.com to request a link to the replay once it is available.

    Webinar Speakers
    [​IMG]
    Graham Day
    Senior Vice President, Chief Investment Officer
    Innovator Capital Management

    [​IMG]
    Justin Fischler
    Head of Index Options
    Old Mission Capital

    [​IMG]
    Mandy Xu
    VP, Head of Derivatives Intelligence
    Cboe Global Markets
     
    nitrene and BMK like this.
  2. nitrene

    nitrene

    Graham Day was on a few times on CNBC's ETF Edge show to talk about that strategy. It seems simple enough. Mandy Xu is always on CNBC but she usually talks about VIX options and options trends in the market.

    Calamos has a buffer ETF (CPSM) uses 3 option trades simultaneously to achieve 100% downside risk over a 1 year period:

    1) Buy DITM call
    2) Buy ATM put
    3) Buy OTM call
     
  3. How the three option buy strategy to hedge 100% down risk?
     
  4. newwurldmn

    newwurldmn

    typo. They sell the OTM call.

    the edge comes from the fact you give up the dividends.
     
  5. jamesbp

    jamesbp

    Seems as an odd structure (DITM +Call / ATM +Put / OTM -Call) when you could just

    Buy ATM/OTM Call Spread
    + earn int on balance investment

    Unless some form of tax arb ?
     
  6. the trade off is to give up stock moving up potential to some extent
     
  7. I also assume that they are using some of the interest right?
     
  8. newwurldmn

    newwurldmn

    yeah. but you give that up if you bought the stock too.
    Both are completely funded.
     
  9. True, you’re right