INVESTMENT APPROACH
•
React to the markets versus anticipate them
• Sell Put Options – Fund commits to purchasing
stock at contract prices on specific
dates generally one to six months in duration:
- Generates cash
- Results in income from expired contracts, or the purchase
of securities at prices generally lower than market as of date
of original trade
- High rate of expiration – allows for leverage and greater
number of contracts sold
- Multiple price points and maturities, spreads risk and opportunities
- Profits derived during flat or even modestly down markets
- Shorter term "in the money" puts
• Opportunistic approach to buy on dips or get enhanced
income on snap back rallies
Risks
- Does not fully exploit rapidly rising markets
- Sharp market drops increases volatility and thus value of
contractual liability. This could result in exiting contracts
at losses as compared to underlying intrinsic values
