Market Measures

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Alpha & Betas of Different Strategies

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Alpha and beta are useful metrics for gauging the performance of a portfolio relative to the market.

While alpha estimates an investment's percent excess return relative to the market, beta is a measure of its systematic risk/market exposure.

Generally, we are interested in high alpha strategies (alpha > 0) that have low market exposure (beta < 1), so today we compare the alphas and betas for different strangle strategies.

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