Capturing the upside with call options works reasonably well, but capturing the downside with put options is structurally less effective because of the underlying upward drift, so a long-straddle (buy calls, lesser puts) portfolio delivers only modest outperformance and not smoothly, due to path dependency in options.

factualpending

Speaker

Mike Green

Evidence Quote

a put option tends to be a little bit less effective because of the underlying drift

Source

The Trillion Dollar Trap | Mike Green on Passive Investing's Fatal Design FlawExcess Returns
Created: 6/18/2026, 1:59:25 PM

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