Using Option Strategies to Help Manage Portfolio Volatility

Learn how options strategies can help manage the volatility of equities and create a smoother ride.

  • Like driving on the highway, owning stocks is generally the fastest route to investment returns. But it can also be the riskiest, because the equity markets go up – and down.
  • Option strategies can help manage the volatility of equities and create a smoother ride.
  • An options-based strategy can offer a way to gain exposure to the broad stock market – and the long-term returns associated with it – but with less risk.
  • When options are used routinely to create a lower risk profile, the strategy is often called low volatility – or low vol – equity investing.
  • Options can also be used defensively, to help protect against stock market turbulence – because losing less when markets fall improves the chances of achieving your investment goals. 
Options may be used for hedging purposes, but also entail risks related to liquidity, market conditions and credit that may increase volatility. The value of the portfolio’s positions in options may fluctuate in response to changes in the value of the underlying asset. Selling call options may limit returns in a rising market.

Volatility management techniques may result in periods of loss and under performance, may limit the ability to participate in rising markets and may increase transaction costs.

Equity securities are volatile and can decline significantly in response to broad market and economic conditions.

All investing involves risk, including the risk of loss. Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit or call 800-225-5478 for a prospectus or a summary prospectus containing this and other information. Read it carefully.

Natixis Distribution, LLC is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.