Roboadvisors and options/derivatives

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scanta2
Posts: 2
Joined: Tue Sep 08, 2020 2:57 pm

Roboadvisors and options/derivatives

Post by scanta2 »

Are there any roboadvisors that use options/futures or any other derivatives as part of their investment strategy?
000
Posts: 2248
Joined: Thu Jul 23, 2020 12:04 am

Re: Roboadvisors and options/derivatives

Post by 000 »

I am not aware of any.

Are you seeking such a robo?

Why?
Topic Author
scanta2
Posts: 2
Joined: Tue Sep 08, 2020 2:57 pm

Re: Roboadvisors and options/derivatives

Post by scanta2 »

Such a robo might be able to run more complex strategies, or **hopefully** get better return/lower risk?
stormcrow
Posts: 89
Joined: Thu Nov 21, 2019 4:12 pm

Re: Roboadvisors and options/derivatives

Post by stormcrow »

Sounds more like some sort of hedge fund perhaps.
ChrisBenn
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Joined: Mon Aug 05, 2019 7:56 pm

Re: Roboadvisors and options/derivatives

Post by ChrisBenn »

I would actually be tempted to take the other side of those option/derivative roboadvisors.

Long total market, short aggregate roboadvisors funds that pursued option strategies.

:D
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arcticpineapplecorp.
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Joined: Tue Mar 06, 2012 9:22 pm

Re: Roboadvisors and options/derivatives

Post by arcticpineapplecorp. »

scanta2 wrote: Tue Sep 15, 2020 5:45 am Such a robo might be able to run more complex strategies, or **hopefully** get better return/lower risk?
to answer your question because some don't like it when their question isn't answered, no, i know of no such roboadvisor.

now that that's out of the way...

1. do you have evidence that shows that complex strategies have gotten better return/lower risk?

2. if not, why are you willing to take a strategy that has no evidence of better return/lower risk?

3. have you heard of the return/risk relationship?

if not, this means that risk and reward are inextricably linked. You get higher returns for taking higher risk, not lower risk. Because of this relationship, if you want lower risk, you'd get lower returns.

I find it amusing whenever someone asks how to get higher return with less risk. Always makes me think of Bernie Madoff. or Charles Givens. There's no free lunch. Wanting it doesn't make it so.

4. you say "hopefully" so you don't seem certain about this strategy.

Why would you take a gamble on a strategy that's not certain, as opposed to owning the market and getting a guaranteed return of the market (minus costs)?

I find it funny when the guaranteed return of the market isn't somehow good enough. Guess that's greed.
I find it funny when people who want returns that are better than the market are the same people who usually panic sell everytime the market falls. Guess that's fear.

5. if such a roboadvisor existed that gave people higher returns with less risk, why wouldn't everyone invest in them?

6. Think about it. If there was a strategy that gave higher returns with less risk wouldn't the stock market disappear in a heartbeat? Why? Why would anyone take the risk of the stock market if they could put their money into a magical/mythical product that offered them higher returns than the stock market, with less risk than the stock market? Poof. Bye bye stock market. No one would put their money there right? What does that tell you? This magical/mythical product you seek doesn't exist.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. get a plan: www.bogleheads.org/wiki/Investment_policy_statement
000
Posts: 2248
Joined: Thu Jul 23, 2020 12:04 am

Re: Roboadvisors and options/derivatives

Post by 000 »

One can write one's own computerized trading program that works with a broker offering API access. Interactive Brokers is one such platform.

Note: not a recommendation.
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