What Constitutes a Reliable Investment?

Smart and Effective Risk Management Includes the Following Safety Measures:

  • A deep understanding, identification and assessment of risk parameters.
  • Implementation of strategies to rebalance risks, ensuring that losses for bond and preferred shareholders are avoided.
  • Implementation of strategies to minimize risk and limit losses during periods of high volatility and/or market drawdowns. (Establishing and implementing strategies to limit maximum losses, no greater than the value of the portfolio i.e.. Stop-Loss Order)
  • Substantial investment and constant monitoring of strategies by board members, including front end trading activity.

 

Implied and Realized Volatility Levels S&P 500

The chief concept behind РV Invеstīсijаs’ option writing strategy is based on the following principle: Non-idiosyncratic market conditions lead to a positive difference between implied volatility and realized volatility, and equate to consistent and substantial gains in РV Invеstīсijаs’ option writing strategy in the form of a “Volatility Risk Premium”.

S&P 500 Realized Volatility vs Implied Volatility January 1, 1994-April 19, 2017

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Difference Between Implied and Realized Volatility
S&P 500 - Volatility Risk Premium

Because speculators highly demand hedges, they are willing to pay a premium to sellers of such instruments. The rare occurrence of extreme market downturns therefore allows РV Invеstīсijаs on average to collect a significant “Volatility Risk Premium”.

S&P 500 Implied Volatility - Realized Volatility January 1, 19994-April 19, 2017

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