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Market Measures

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Passive vs Active Returns

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.

On average since 2005, long stock outperformed short strangles in very low IV environments. In higher IV environments, short strangles outperformed long stock, while the volatility of both strategies was comparable.

Finally, there was no IV environment where short strangles had a negative return, while long stock is almost certainly going to lose in higher IV environments.

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