Half of Financial Advisors Use Options

The use of options by financial advisors is on the rise and the most commonly
used options trading strategy is the covered call, according to a new study from
The Options Industry Council (OIC). Nearly half of financial advisors used
options in the last year for their clients, and more than a third of financial
advisors who use options increased their use of the product over the past few
years, according to the study. Financial advisors use options primarily for
income generation and for hedging portfolios in response to market conditions,
and they typically do so at the request of their clients. The most commonly used
option strategy is the covered call, where the investor owns a stock or
exchange-trade fund and sells a call option against it to generate income. This
strategy was implemented by 69% of the Financial Advisors who use options.
Nearly 60% of the FAs that use options use the product to hedge an existing
portfolio. A little less than half the FAs said they used options to speculate.
Find more option analysis and trading ideas at Options Trading Strategies . The
Financial Advisor Benchmark Study was conducted by Bellomy Research and included
interviews with more than 600 financial advisors nationwide. The study was
released in conjunction with the start of the 29 th Annual Options Industry
Conference that began yesterday in Savannah, Ga. Bellomy reports that advisors
with larger books of business are significantly more likely to use options than
those with smaller books. On the top end, 94% of advisors with $500 million or
more under managements said they had bought or sold options in the preceding 12
months. Of FAs with $100 million to $500 million under management, 78% had used
options while about half the advisors with $50 million to $100 million under
management had used options. OIC is an industry cooperative funded by BATS
Options, Boston Options Exchange, Chicago Board Options Exchange (NASDAQ: CBOE
), International Securities Exchange, the NASDAQ OMX PHLX and NASDAQ Options
Market divisions of the NASDAQ OMX Group (NASDAQ: NDAQ ), the NYSE Amex Options
and NYSE Arca Options divisions of the  NYSE Euronext (NYSE: NYX ), and The
Options Clearing Corporation.