Vest’s interface allows advisors to choose how much risk they want to take in a portfolio—how much downside protection they want to buy and whether they want to offer some of their potential upside to cover the cost of the options contract. The platform performs all of the calculations involved in purchasing the strategies behind the scenes.

Joel Bruckenstein, publisher of Technology Tools for Today, says that while Vest’s philosophy and functionality impress him, he’s skeptical about bringing options trading to a wider audience.

“These are sophisticated strategies; anyone using them should be a sophisticated investor,” Bruckenstein says. “If they’re a sophisticated investor, they already understand how to do simple hedges. They do their own research first, and there are better, more sophisticated tools for those types of investors to use for options trading.”

Vest’s target market is the RIA channel, Sood says, but the platform is also open to individual investors.

For the latter, the platform can be used to hedge investments in one stock or ETF at a time. Currently, clients can access strategies for between 600 and 700 individual investments on Vest. The minimum trade size is 100 shares.

Investors might balk at Vest’s fees. Though there are no commissions on trades, the company charges a 0.5% annualized fee for assets invested through its platform.

“To me, that seems a little high,” Bruckenstein says. “If you’re an affluent investor, for whom these strategies are appropriate, for somewhat more you can get a comprehensive wealth management firm that will do this for you, plus give you a financial plan, plus do tax planning, estate planning, risk management and quite a few other things. Isn’t that preferable?”

But Sood says the time might be right for a platform like Vest because diversification has become less effective as a risk management strategy as investment products like commodities, stocks and bonds become more strongly correlated.

“In times like these, when you need diversification most, it doesn’t work because things go into lockstep,” Sood says. “Options aren’t an uncorrelated strategy; they act as insurance for your investments.”

And he says options strategies fit better with younger, conservative or more passive investors than hedge funds or other managed strategies.