Tradelegs Announces Portfolio Hedging with a Combination of SPX and VIX Options
Monday, December 31, 2018 11:45 AM
NEW YORK, NY / ACCESSWIRE / December 31, 2018 / Tradelegs, the leader in AI optimization of derivatives strategies, today announced the release of Tradelegs Derivatives Strategist (TLDS) Version 5.0 – their fifth major release since launching the decision-support platform. Included in this release is an expansion of their Portfolio Hedging functionality that, for the first time, empowers TLDS users to structure hedges by investing in an optimized combination of SPX and VIX options.
TLDS analyzes the client’s portfolio and supports the client in allocating hedging between SPX and VIX options. Tradelegs’ powerful artificial intelligence technology is then deployed to structure the optimal strategy that maximizes the user’s hedging criteria while meeting their risk and cost constraints. Clients can subscribe directly to the software or access the technology through a team of expert advisors.
Because options hedging is explicitly linked to an underlier, it can provide a more reliable hedge than portfolio diversification, which depends on correlation analysis and does not always provide protection in a major dislocation. Additionally, option hedges can provide asymmetrical payouts that allow upside in favorable movements while protecting against adverse movements.
By combining SPX and VIX options, clients can tailor their exposure to changes in the price of the underlier or implied volatility depending upon their needs. Many practitioners desire exposure to exchange-listed volatility specific products such as VIX futures and options, which have the benefit of negative correlation with SPX without some of the unwanted path-dependent characteristics of fixed strike options on the S&P500.
“Tradelegs Portfolio Hedging allows the client more precise control over hedging scope and hedging costs while maintaining significant portfolio returns should the market move favorably” said Gideon Agar, CEO and Co-Founder of Tradelegs.” This version of TLDS enables clients with extensive or little experience of trading SPX and VIX to gain the benefits of combining both.”
Tradelegs’ Options AI technology and services enable a new generation of systematic strategies and decision support tools.
Financial product partners and institutional investors can create or utilize custom indexes that are simultaneously active and non-discretionary, and that dynamically adapt to changing markets.
Hedge funds can automatically transform their equity positions with options strategies that leverage their research and significantly improve P&L, even for relatively short-term trading horizons.
Advanced AI Optimization and Deep Learning are coupled with sophisticated options analytics to identify provably optimal strategies – that maximize expected profit, beat a benchmark, hedge, or deliver a desired payout – while meeting defined risk and capital constraints.
SOURCE: Tradelegs, LLC