Ironclad Reduced Volatility

Overview

The Ironclad Reduced Volatility strategy focuses on mitigating risk and providing steady returns through the use of sophisticated options strategies and innovative ETFs. This strategy is designed for investors seeking a balance between growth and stability.

Investment Process

Our investment process for the Reduced Volatility strategy leverages ETFs that utilize options strategies such as collars, covered calls, and cash-secured puts. These strategies aim to reduce volatility and provide defined outcomes, enhancing the predictability of returns.

  • Collars: A collar strategy involves holding the underlying asset while buying a protective put and selling a covered call. This strategy limits both potential gains and losses, providing a safety net during market downturns.
  • Covered Calls: In this strategy, an investor holds a long position in an asset and sells call options on the same asset to generate income. This strategy works well in stable or mildly bullish markets.
  • Cash-Secured Puts: Selling put options while holding enough cash to purchase the underlying asset if the option is exercised. This strategy can provide income while potentially buying assets at a lower price.
  • Protective Puts: Buying put options on an asset that an investor already owns to guard against potential losses. This strategy acts as an insurance policy against declines in the asset's price.

Innovative ETFs: SFLR and QFLR

We incorporate specialized ETFs such as the Innovator Laddered Fund of S&P 500 Power Buffer ETFs™ (SFLR) and Innovator U.S. Equity Power Buffer ETF™ - Quarterly (QFLR) to enhance our reduced volatility strategy.

  • SFLR: This ETF utilizes a laddered approach to investing in S&P 500 Power Buffer ETFs™. The strategy spreads investments across multiple ETFs with different buffer levels and expiration dates, providing a continuous buffer against losses while participating in market gains.
  • QFLR: This ETF aims to provide upside exposure to the U.S. equity market while buffering against downside risk. The fund resets quarterly, offering a fresh buffer against losses every three months.

These ETFs offer a cost-effective way to implement complex options strategies without the need to manage individual positions. They provide a defined outcome, reducing uncertainty and helping investors align their portfolios with their risk tolerance and investment goals.

Benefits of Using ETFs

Using ETFs like SFLR and QFLR for reduced volatility strategies offers several benefits:

  • Cost-Effectiveness: ETFs typically have lower fees compared to managing individual options positions, reducing overall investment costs.
  • Defined Outcomes: These ETFs provide clear parameters for potential gains and losses, helping investors understand and manage their risk more effectively.
  • Ease of Use: Investing in ETFs simplifies the process of implementing options strategies, making sophisticated approaches accessible to a broader range of investors.
  • Professional Management: These ETFs are managed by experienced professionals, ensuring that the strategies are executed efficiently and effectively.

Strategic Benefits

The Ironclad Reduced Volatility strategy aims to achieve the following benefits:

  • Risk Mitigation: Utilizing options strategies to buffer against market downturns and protect against significant losses.
  • Steady Returns: Generating consistent income through options premiums and participating in market gains up to a certain cap.
  • Enhanced Predictability: Providing defined outcomes to help investors plan and manage their financial goals more effectively.
  • Diversification: Spreading investments across various options strategies and asset classes to reduce overall portfolio risk.
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