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Steve Cohen’s Portfolio: Notice Anything?

The Top 1% use options in a very specific way, and they have been doing it for 40 years. It’s their secret that gives them an options advantage, or Edge. This lesson gives you insights on how a top Hedge Fund Manager uses options in his portfolio. More specifically, it helps you appreciate why Steve Cohen uses options in some instances and not in others. I also lay out the two options questions that separate you from Steve Cohen, and then where you can find the answers.

Who is Steve Cohen?

I talk a lot about Steve Cohen in my options trading course. He is the former Hedge Fund Manager of SAC Capital, who today runs Point 72 Asset Management.

Hedge Fund Manager Steve Cohen

Steve Cohen is considered one of the best investors of our time and a master of risk-reward. He is also one of the largest options traders on Wall Street. Steve Cohen uses options as a tool to manage the risk-reward in his portfolio. He uses them for leverage and as a hedge.

Steve Cohen's Portfolio

I want to show you Steve Cohen's top 48 stock positions from his portfolio as of March 31st.

Steve Cohen portfolio 2
Steve Cohen portfolio 3
Steve Cohen Portfolio 4

The "Amount" column is the amount of shares or options he has on, while "Change" is the change of shares or options from his previous filing. 

"Position Size" is his total position size in notional dollar value. By looking at the column on the far-right, notice that Steve Cohen’s holdings are ranked by Position Size from highest to lowest.

The Walt Disney Co (DIS) is his largest position at $1.1 Billion dollars, which indicates a high-degree of confidence with this trade.

Notice, that Walt Disney has 3 positions - stock, call options (light green background) and put options (light red). So, if you see a light green or red background it means that he has chosen to use options on that particular stock position.  

You can see several options trades in his portfolio.  

Now, go back and scan down. Let’s see if you notice anything.

Options vs. Stock

Let me show you what I notice. 

Of his Top 10 Positions, 8 have options positions. Below that we see very few. In fact, of the next 38 stock positions, only 3 of them use options.

The first takeaway should be clear. Steve Cohen sees an opportunity to use options only in specific stocks. In other words, some positions use options and others don’t. So, it’s important to understand that every Stock Idea is not necessarily an Options idea.

Steve Cohen stock vs Options

This leads to the next question:

When does Steve Cohen use options?

Or why does Steve Cohen trade options mainly in his Top 10 Positions?

Confidence & Leverage

Hedge Fund Manager Steve Cohen predominantly uses options with his best stock ideas, which translates to the stock ideas where he is most confident. He uses options with these stock ideas because he wants to leverage the returns of those ideas.

Options are a tool that offer him that leverage.

But high confidence in the stock idea is not the only requirement. If that was the case, then he would have bought options in all of (and only) his Top 10 positions.

He didn’t.

Steve Cohen uses options when it shifts the risk reward in his favor. Now the next question is: 

How does Steve Cohen know when the options shift the balance of risk reward in his favor? 

Hedge Fund Manager Steve Cohen Risk Reward Analysis

This is the hardest options question that will ultimately define your success with buying options. Unfortunately, the available options education doesn't offer an answer. I built my options trading course, 3 Steps to Profit, to finally give you the answers you need to succeed at options ... over the long term.

Groundbreaking Education

At OptionsGeek, you’ll learn how to shift the balance of risk reward in your favor by answering the two questions that the available options education fails to answer: 

  1. When do I use Options?  
  2. Which Option do I choose?

You see, I’ve changed the conversation from the traditional concepts offered by the Options Industry (the Option Greeks and Implied volatility) to easier concepts like probabilities, confidence, and risk reward.

Once you understand these concepts and how they relate to options, I’ve created a New Options Chain that does all the option calculations. This patented options tool takes away all the necessary options analysis, and then gives you the answers you need to find the best call options to buy today. (Puts too!) 

The Options Chain to find the best call options to buy today

The New Options Chain helps you buy options just like Hedge Fund Manager Steve Cohen. 

So, do you have a good stock idea and want to know if options might be the better investment?

Before trading the stock, let the New Options Chain tell you whether or not that idea is a great Options Idea. 

What's Next?

Don't miss out on the next lesson where I discuss my personal work experience with 2 of the top Hedge Fund Managers over the last 30 years. They both happen to be friends with Steve Cohen.

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