- If the C2 star program aims to provide more profitable and safe strategies for investors, banning options trading is not good for a portfolio manager. From my perspective, I think sophisticated equity portfolio management should trade with options in order to hedge the portfolio or individual asset risks out.
- It should not be seen just from the lens of leverage trading if you think banning such an instrument could lower strategy risks. It also could be seen as a method/ instrument to hedge portfolio risks. i.e. ROI (shape ratio) can be higher than just buying/selling the underlying stocks due to the characteristics of options, which is the unsymmetrical return.
- Also, for instance - if a strategy manager thinks the market could be affected by a specific economic data release based on his forecasting of economic trends, he can buy some put options contracts with an equal value to his positions to hedge the short-term market risk in order to protect his portfolio if his portfolio is long-only. The cost of holding these “insurance contracts” is also lower than underlying stocks.
I don’t know why the C2 Star program can’t trade options.
