Market Measures

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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.

This segment reveals the results of a study comparing the returns of the best performing mutual fund after fees to a mechanical strategy of selling put spreads in the S&P 500. The results are enlightening.

The question is is it better to have your money managed for you or to take control and do it yourself? We compared the best manager’s results to a simple mechanical strategy of selling put spreads. Would your $10,000 be better off with a great performing manager or in your own hands?

A study was conducted using the SPX from 2010 to present. We mechanically sold a 100 point wide put spread with the short strike 84% out-of-the-money (OTM) on every Friday with 7 days to expiration (DTE). We closed the following Friday so only $10,000 was at risk at any one time. We compared this to investing $10,000 in the best performing mutual fund over the last 5 years.

A table comparing the 100 point SPX put spread (over 5 years) to the best performing 5 year mutual fund. The table showed the P/L, percentage of wins, cumulative return on capital (ROC), and average ROC per month. A second table included the fees for each strategy mentioned. The table included the gross P/L, commissions, back-end load, expense ratio and net P/L.

Watch this segment of “Market Measures” with Tom Sosnoff and Tony Battista for the takeaways and other important information comparing a short SPX put spread ($10,000 at risk) to investing $10,000 into the best performing mutual fund.

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