Analysis

Diversification

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Spreading risk across multiple uncorrelated positions

What is Diversification?

Diversification The practice of spreading investments across multiple assets, sectors, or strategies to reduce portfolio risk. In options trading, diversification means trading across multiple underlyings, using different strategy types, and staggering expirations. True diversification requires positions that are not highly correlated.

Complete Definition

The practice of spreading investments across multiple assets, sectors, or strategies to reduce portfolio risk. In options trading, diversification means trading across multiple underlyings, using different strategy types, and staggering expirations. True diversification requires positions that are not highly correlated.

Related Terms

Correlation Position Sizing Portfolio Margin

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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