Portable Alpha describes an investment approach that collateralizes derivatives-based market exposure (commonly referred to as beta) with an unrelated investment in a strategy or set of strategies designed to generate attractive risk-adjusted return (alpha).

The key building block of the portable alpha investment application is the availability of a liquid, cost-effective derivatives market for the desired beta exposure. An investor can then finance the beta exposure, typically at a money market-based interest rate, while investing all (or a majority) of the initial capital in the alpha strategy.