Portfolio Protection Utilizing Calendar Spreads
The Theory is pretty easy to understand. It is backed up by mounds of statistical proofs and observations. Advanced math skills are not necessary. It is really borne out of two separate but interrelated concepts … 1) Market Performance and 2) Individual Performance. Let’s take a look at these two elements:
Market Performance:
A statistical proof exists; separate from data collection or observation, that indicates the market should have an upward bias (or positive skew). Obser
Calendar Spreads (including diagonals and ratios) can be a very effective method to “hedge” a portfolio. However, it is not without some complexities.Understanding the Theory and Methodology is important to achieve one’s intended result. In essence, one must understand the whys as well as the hows or they will continuously be faced trying to resolve dilemmas along the way.
