We said that options can be used either to scale up or reduce overall portfolio risk. What are some examples of risk-increasing and risk-reducing options strategies? Explain each.

Risk increasing strategy

(1) investing in "all options" portfolio

Risk reducing strategy

(2) protective put strategy

Explanation: Options is a Financial derivative that gives an investor to buy or sell a given asset at a specific price in a given period of time.

Risk increasing strategies are investment strategies that posses great threat and risk to the investor, this type of strategy includes INVESTING IN "ALL OPTION" PORTFOLIO,The Opportunities provided by options makes this strategy very risky, and has the ability to be very profitable.

Risk reducing strategy are investment options that poses little or no threat to the investor it includes PROTECTIVE PUT STRATEGY this Strategy ensures that the investor invests in a put in an already existing portfolio where the price is some where less than the market price, this makes it less of a threat to o the investor.

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