BXY and PUT Indexes Both Had Higher Returns & Lower Vol Than S&P 500 Over Past 20 Years

In a Dec. 22, 2012, Barron’s column entitled “Profiting From Selling Puts, Calls” Steven Sears wrote –

“ … In 2012 all of Wall Street and much of Main Street embraced options … It was a good year to sell calls. It was an even better year to sell puts. … By strategically selling puts and calls, investors can collect conditional dividends from the options market. … As of Thursday’s close, the Chicago Board Options Exchange’s BuyWrite Index (BXM) was up 5.4% on the year. The CBOE’s 2% OTM BuyWrite Index (BXY), which sells out-of-the-money calls, was up 10.4%. The S&P 500 PutWrite Index (PUT) was up 7.6%. … “


The four charts below present year-end updates on the PUT, BXY, BXM, and several other indexes. Many risk-averse, income oriented investors now are exploring these indexes.

The webpage www.cboe.com/benchmarks has more information on these indexes, and links to a number of papers on the selling of index options, including —