Conditional stochastic dominance

We highlight the loss aversion property of the general investors and propose a new ranking criterion, conditional stochastic dominance (CSD). We also introduce an example to show that CSD provides an intuitive ranking, but the almost stochastic dominance (ASD) by Lashon and Levy (2002) cannot. Furthermore, we select six representative covered call strategy indexes, and the Standard & Poor’s 500 aggregate market index functions as the benchmark for empirical analysis. The estimation outcomes indicate that CSD outperforms ASD in providing a refined depiction of the performance comparisons and showing the specific properties of covered call strategy indexes.