The Research About Options Hedging Index Strategy Private Equity Investment Fund Risk

Options have the flexibility to be used in a variety of strategies.Investors gain leverage on stocks without committing to trade,thereby increasing the efficiency of capital use.At the same time,investors9 loss can also be limited to options fee through the construction of option portfolios.The risk of lossing of fees allows investors to protect their positions from price fluctuations when they do not wish to change their underlying positions.The benefits of options have made it an important and very popular financial tool since its introduction in 1973.However,because the management of options is relatively complex and requires constant attention and control,despite the extensive research on the subject,the impact of options trading on the underlying asset market remains controversial.There are differences in the options contracts studied by different scholars and the number of samples selected,time periods,market trading restrictions,etc.,so the conclusions are different.China’s stock option market is still immature relative to developed countries in terms of development time,market depth and trading system.The effect of trading option on the underlying market and even the vertical application of hedge funds is naturally different from that in foreign countries.Therefore,it is necessary to test the application of options to China’s financial markets.This paper uses the option contract data formed based on the transactions of the past two years,and combines it with the underlying asset,SSE 50 ETF,to form a new portfolio and obtain new data.Through the analysis of these data,the relevant indicators such as the rate of return,variance,and Sharpe ratio are calculated,and the conclusions are drawn in the comparison.It is proved that adding the option in the fund portfolio can actually reduce the fluctuation and greatly improve the risk-adjusted income,especially in the Falling in the market.