FTAdviser.com

When advisers talk of giving clients as many options as possible, chances are they’re not talking about financial instruments.

In most investors’ lives, “put options” is a term reserved for the golf course, while “call options” are for emergencies only.

Yet options are no longer just the preserve of financial wunderkinds and directors buying into their own companies at attractive prices. They are becoming increasingly common in investors’ portfolios.

As an option is quite literally an option to buy or sell something at a particular price, it can come in handy if you need to buy something whose price is unstable. Put options are the options to sell. Call options are the options to buy.

Some retail funds can mitigate the effects of volatility by flogging a few options, which are often most in demand when markets are most volatile.  An elderly investor after a whopping retirement income might also opt for an “income maximiser” like the Schroders fund of the same name.

These funds hold stocks and sell other people the option to buy them, generating a neat percentage a year for their devotees. Although gilts are not exactly the most volatile asset class, City Financial has turned a nice profit on its Strategic Gilt fund by selling options off the back of its UK government bond holdings.

With the markets veering around all over the place, the option to have options is attractive. But some investors, with so many options for their options already out there, may see them as a confusing optional extra.