Enhanced indexation strategies show promise with options integration. Researchers analyzed S&P 500 index options combined with equity assets using second-order stochastic dominance methodology. Testing data from 2017 to 2025 revealed that incorporating option strategies as artificial assets improved portfolio performance compared to traditional equity-only approaches. The study examined both individual stocks and exchange-traded funds within enhanced indexation frameworks. Results indicate options trading strategies, when systematically applied based on market conditions, deliver measurable out-of-sample performance gains. This computational finance research suggests portfolio managers can optimize index tracking by strategically integrating derivatives alongside traditional holdings.
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