Does Formula Stocks use options trading?

No, does not use options trading, only buying and selling of stocks.

While our high win ratios at first this might seem like a great opportunity to utilize call options the holding period could make this trading strategy very unattractive.

Formula Stocks is a longterm investment strategy with an average holding period of 2.2 years (max 4 years). This would mean to still achieve our high win ratio you would have to purchase options very far in the future (which comes at a high premium).

Afterwards many options will slowly lose value over time if the upwards volatility stays low often resulting in losses even if the stock slowly increases in value.

We recommend simply following the model portfolio by buying, holding and selling shares.

Updated on: 10/08/2021