Strategy


Objective:

The Fund’s investment objective is capital appreciation through the use of a variety of investment strategies and techniques that work well in good times and bad to produce equity-like returns with lower volatility and draw-downs in all markets.

Strategy:

The Fund invests in call and put options on the S&P 500 to achieve capital preservation and appreciation in all market conditions. Option buyers typically have negative return expectations.  Theta Investments sells options realizing a positive expected return.

Option time decay can be profitable even in stagnant market conditions.  As options are expiring assets, the entire extrinsic value is exposed to time decay, which will, all else held equal, eat away at the value of an option every day.  The amount of time decay will increase as the option approaches expiration.  An option has no time value at expiration and is only worth its intrinsic value.