Crash-Proof Your Portfolio. Boost Your Potential Returns.
Protect your investments and maximize your potential returns
Protect your investments
Portfolio Armor helps you hedge your stocks and ETFs by showing you the optimal put options and optimal collars to give you the precise level of protection you want at the lowest cost.
Boost Your Potential Returns
You decide the most you're willing to risk. Portfolio Armor presents you with a portfolio of optimally hedged securities constructed to give you the highest potential return possible given your risk tolerance.
About hedging your investments with optimal put options and collars
Why Put Options?
Only put options ("puts") protect you against losses from downward jumps in security prices. Puts effectively limit the loss that can be incurred when a security jumps down to a lower price without trading at any of the prices in between.
Collars can reduce the cost of hedging, if you are willing to cap your potential upside. In some cases, collars can eliminate the cost of hedging entirely, or even pay you to hedge (when the income from the call leg exceeds the cost of the put leg, as in the Priceline.com example above, where the optimal collar has a negative net cost).
How it works
You enter your stock or ETF position, and the maximum downside risk you are willing to accept for it (your "threshold"). If you are willing to limit your potential upside, you also enter the minimum upside you are willing to accept if your security appreciates significantly (your "cap"). Then, using its proprietary algorithm, Portfolio Armor shows you the optimal puts (if you didn't enter a cap), or the optimal collar (if you did enter a cap) to most economically hedge the position.
About Boosting Your Potential Returns
Find the securities with the highest expected returns
There are more than 3,000 hedgeable securities (stocks and ETFs) trading in the US. Portfolio Armor calculates expected returns for each of them every trading day, using an analysis of historical returns as well as options market sentiment to estimate how each security will perform over the next six months.
Find the ones that are also cheap to hedge
Since you're going to hedge these securities, you don't just want them to have high expected returns — the cost of hedging counts too. So we scan for the ones that have the highest expected returns net of hedging costs — the ones with the highest net expected returns.
Since each security is precisely hedged, you don't need broad diversification to limit your risk. So you can concentrate your assets in a handful of securities with the highest net expected returns. The higher the net expected returns of each security, the higher the potential return of your portfolio.
Although Portfolio Armor is a very sophisticated tool capable of providing useful calculations it is not designed to replace the advice of a professional investment counselor or your own independent investment research and independent calculations. To rely solely upon the Portfolio Armor tool for investment decisions would be extremely unwise.