I don't write it off someone wanting to use options for some idiosyncratic portfolio constraint. I think however there is no simplistic explanation of the empirical historical excess returns from options writing.You are quite good at challenging other's thoughts and I value the great insights you have provided in some of your posts which have caused me to rethink. However, I felt I needed to challenge your writing off of the basic purpose and only real reason why someone would purchase a put. This then extends to why someone would sell a put and gets directly at whether or not a profit is likely to continue from selling puts into the future.
I think the original question was (re-phrasing it a bit) whether positive returns can be systematically generated with options writing strategies, that are uncorrelated to market returns. The OP doesn't mention explicitly why he is asking; but natural follow-up questions are if and how such strategies might be part of an asset allocation to benefit risk-adjusted expected portfolio returns. I think those interesting questions have not been answered or even seriously examined in this forum. If you say next that it's not boglehead-like, I beg to disagree; and also terminology really doesn't matter. Asset allocation is systematic exposure to systematic risk factors for purpose of maximizing expected risk-adjusted returns.
Statistics: Posted by comeinvest — Sat Jun 08, 2024 11:32 pm