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SPX options trading holds considerable importance in the trading world. It offers a deeper market reach to investors with its exposure to the entire S&P 500 Index. Its traders have an easier time realizing their profits since SPX options are settled in cash. And, best of all, SPX options qualify for a special tax rule that allows 60% of its profits to be treated as long-term capital gains regardless of how long the options were held.
Aside from these, SPX options offer great potential for managing the overall risk of your portfolio, especially if you have significant exposure to individual stocks. Here are the ways SPX options can manage the overall risk of your portfolio:
Now, reaping the benefits of SPX risk management requires you to have a consistent and high win-rate trading strategy for it. This is where All American Group can help you. Our real-time alerts, tailored strategies to your risk tolerance and goals, and advanced analytics can help you create an effective strategy while managing the risk of trading SPX options.
Although the S&P 500 Index is less volatile than an individual stock, trading SPX options still presents a significant risk to your capital. And, this volatility can dramatically increase with a significant geopolitical event, a sudden change in market sentiment, or breaking news on economic indicators to change the index’s trend and make your trading position contrary to where the market is going. To illustrate, the S&P 500 Index has daily volatility ranging from 1.27% (504 points) to 1.72% (685 points) change in daily value in 2023, but significant market events in the past 5 years increased it to a range of 9.64% to 13.31% change in daily value.
You can mitigate this volatility to protect yourself from potential pitfalls, preserve your hard-earned capital with proper risk management, and mitigate risk from adverse price movements. This can be achieved through position sizing to avoid overexposure, stop-loss orders to limit losses, and take profit orders to protect profits. You can even take this further with options trading strategies, like covered calls or puts and vertical spreads, to reduce upfront costs and potential losses.
Through our proprietary algorithms, All American Group provides options trading strategies to our users. It does not matter if a trader has no experience or is an expert in trading SPX options. With our learning resources and proven algorithm-based strategy, they can navigate the markets and SPX options trading seamlessly while boosting the performance of their portfolio.
All American Group utilizes its proprietary algorithms in developing SPX trading strategies for our users. With us, traders do not have to research the market or enter numerous positions to get consistent results. Instead, we will provide everything they need to know to enter a potentially profitable position and manage their risk, including:
Since its inception in September 2020, our algorithm Alfred has been profitable in trading SPX options. It has maintained elevated execution success rates even while testing a variety of risk factors and undergoing algorithmic improvements. It also maintains strong Sharpe ratios indicating a low risk profile with a high success rate.
To date, 93% of our algorithm’s trades have been profitable. It has consistently surpassed the performance of major indices since 2020 year on year. Here are a few details of our returns so far:
Initial Investment: $10,000
Balance (as of 12/31/2023): $257,365
Returns in Percentage: 2,473.65%
2020: 426%
2021: 159.33%
2022: 24.81%
2023: 51.44%
Never miss any changes in the market with our real-time alerts. Our platform monitors and analyzes the S&P 500 Index in real-time. It alerts you of any price movements and volatility spikes that arise, ensuring you never miss any changes in the market and never fail to take the necessary action.
Every trader has different financial goals and risk tolerances. We offer customizable trading strategies tailored to your individual preferences. It does not matter what your risk tolerance is, our platform empowers you to design and implement strategies aligned with your specific objectives.
Our advanced analytics provide valuable insights and actionable intelligence. You can make smarter trading decisions by receiving our platform’s cutting-edge data analysis on market trends and trading opportunities.
Check out All American Group’s algorithm Alfred and see for yourself how it can optimize your SPX risk management. Start your 14-day FREE TRIAL by clicking the link below!
All American Group is NOT a registered broker-dealer or financial advisor. The recommendations and information provided here should NOT be interpreted as investment advice or as an endorsement of any security or company’s stock. This information is provided for informational purposes only and without warranty of any kind. We share our predictions based on our indicators about the market’s direction. But such information is not a specific recommendation to buy, hold, or sell securities or options. We are an informational service only. Day trading and investing are highly speculative and involve substantial risk. Only you can determine what level of risk is suitable for your account. Our strategies are not intended to meet the suitability requirements for every investor. Be advised that stock trading, option trading, and futures trading have large potential rewards and risks. Every option trade can result in losing the entire investment. The trading information we share is for informational purposes only. You, and not All American Group, assume the entire cost and risk of any investing or trading you choose to undertake. All American Group is not responsible for any financial losses or damage that you incur as a result of the information we provided.