Strategy
1 Objectives
- Beta trading
- Earning market risk premia by investing in, for instance, ETFs that replicate the performance of the S&P 500.
- Alpha generation
- Earning risk premia independent of the market by, for example, selling short stocks listed in the S&P 500.
- Static hedging
- Hedging against market risks by buying, for example, out-of-the-money put options on the S&P 500.
- Dynamic hedging
- Hedging against market risks affecting options on the S&P 500 by, for example, dynamically trading futures on the S&P 500.
- Asset-liability management
- Trading S&P 500 stocks and ETFs to be able to cover liabilities resulting from, for example, writing life insurance policies.
- Market making
- Providing, for example, liquidity to options on the S&P 500 by buying and selling options at different bid and ask prices.