Randy Swan: In 1997 I designed and created the Swan Defined Risk Strategy (DRS) to manage risk directly using options to hedge out most of the market risk. Traditionally, our downside risk is somewhere in the high single digits on an annual basis. What this allows us to do is to implement a more systematic approach to investing that quantifies the risk on an annual basis. This strategy is designed to follow the golden rule of investing: buy low, sell high. The second component of the strategy is we sell short-term premiums against the long positions in the portfolio.

Source: Forbes February 23, 2017 18:22 UTC