Over the past 24 years (through June 30) the percentage gains for key indexes have been –
- CBOE BXY Index up 1001% www.cboe.com/BXY
- S&P 500 up 749%, and
- S&P GSCI up 283%.
Both the CBOE S&P 500 BuyWrite Index (BXM) and CBOE S&P 500 2% OTM BuyWrite (BXY) Index have had superior risk-adjusted returns* when compared to stock indexes over the past 20 years.
Studies have shown that index options have tended to be richly priced, and that the BXM Index often generates gross premiums in excess of 20% per year. www.cboe.com/Buywrite
As shown in the table below, the BXY had higher returns and lower volatility than the S&P 500 for various time periods.
*The CBOE S&P 500 BuyWrite Index (BXMSM) and BXY Index (the “indexes”) are designed to represent proposed hypothetical buy-write strategies. Like many passive benchmarks, the Indexes do not take into account significant factors such as transaction costs and taxes. Transaction costs and taxes for a buy-write strategy could be significantly higher than transaction costs for a passive strategy of buying-and-holding stocks. Buywrite strategies often can underperform stocks in rising bull markets. www.cboe.com/buywrite Investors attempting to replicate the Indexes should discuss with their brokers possible timing and liquidity issues. Past performance does not guarantee future results. The methodology of the Indexes is owned by CBOE may be covered by one or more patents or pending patent applications.