The Skinny on Options: Abstract Applications - November 16, 2020 - The Option Frontier


Nov 16 2020 17 mins   4
The crown jewel of Modern Portfolio Theory is the Efficient Frontier, which effectively shows passive investors where the most optimal, risky-asset portfolios can be achieved. As option traders, though, this conclusion is incomplete as it [does not include the possibility of derivative products as asset selections.](https://www.tastytrade.com/tt/shows/from-theory-to-practice/episodes/strategic-diversification-03-02-2016 ) On this morning's Skinny, we explore what an "Option Frontier" might look like, if options were introduced into Modern Portfolio Theory. What we find are improvements to [both risk and return.](https://www.tastytrade.com/tt/shows/from-theory-to-practice/episodes/wdis-remix-options-riskreturn-10-29-2018 )