Insights | 07 January 2019

Put Selling for Institutions

Executive Summary

  • Put writing strategies can deliver equity-like returns over the long term with less sensitivity to market valuations.
  • Put writing returns are generally characterized by lower volatility and shallower drawdowns than long-only equities. This allows for a less volatile profile of distributions.
  • Distributions from put selling have done no worse than long-only equities and in some cases have performed materially better.

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Disclaimer: The views expressed are the views of Van Trieu Le and Michelle Morphew through the period ending January 2019, and are subject to change at any time based on market and other conditions. This is not an offer or solicitation for the purchase or sale of any security and should not be construed as such. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.
The information in this presentation is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. The information in this presentation has been developed internally and/or obtained from sources believed to be reliable; however, GMO does not guarantee the accuracy, adequacy or completeness of such information. The information contained herein may be based on (i) data that may no longer be current, (ii) estimates that may involve highly subjective assessments and (iii) models that may change from time to time and be different from the assumptions and models used by other persons. Such information should not be the basis for determining the value of any security or financial instrument or in making any decision to buy, sell or hold a security or financial instrument.
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