A suite of Options Based Portfolio Management Strategies (OBPMS) including: four passively managed hedged strategies offering the pure beta of the benchmark, available through a separate account with very low institutional pricing, and one actively managed strategy seeking to outperform the passive benchmark available through the West Chester Capital Partners, LP, also at a very low fee schedule. All of these strategies are benchmarked to the options based hedged equity benchmarks created and maintained by the Chicago Board Options Exchange (CBOE). These strategies maintain a long bias which provides significant participation in rising equity markets, combined with a hedging strategy that enhances returns, or establishes a floor value for the portfolio or both. These strategies reduce portfolio volatility through the action of the portfolio hedge, and offer the potential to outperform long-only equity in certain market environments.

Large Cap Buy-Write – a passively managed hedged strategy combining a passively managed long large cap equity portfolio, hedged by selling short, near term at-the-money index call options. Income collected from selling call options enhances returns, reduces volatility, buffers downside exposure, and limits appreciation potential, while maintaining a long bias. As the short options lose value with the passing of time, this strategy dominates in a sideways market environment and benefits from the passing of time. This strategy outperforms long-only equity over all market conditions except strongly rising equity markets, and has historically outperformed long-only equity over the market cycle. This strategy will maintain the hedged profile at all times and seeks to deliver the pure beta of the benchmark. The long term historic return and risk profile of this strategy presents vary favorably on the efficient frontier, relative to both long-only equity and fixed income investments.

Appropriate for tax-exempt investors seeking to make an allocation to a hedged equity strategy, offering enhanced equity returns and lower volatility while maintaining a long biased large cap equity exposure. Since the systematic and permanent short option positions generate significant short term income regardless of whether the strategy gains or loses value in any year, taxable investors will have tax consequences, although they are not prohibited from investing. Available as a separate account with a $100,000 minimum, with a very low fee schedule and daily liquidity.

Large Cap Out-Of-The-Money Buy-Write – a passive hedged strategy combining a passively managed long large cap equity portfolio, hedged by selling short, near term slightly out-the-money index call options. Since the hedge is slightly out-of-the-money,income from selling calls is slightly lower and upside potential is slightly greater than the Large Cap Buy-Write, which uses at-the-money calls as a hedge. Income collected from selling call options enhances returns, reduces volatility, buffers downside exposure, and limits appreciation potential, while maintaining a long bias. As the short options lose value with the passing of time, this strategy dominates in a sideways market environment and benefits from the passing of time. This strategy outperforms long-only equity over all market conditions except strongly rising equity markets, and has historically outperformed long-only equity over the market cycle. This strategy will maintain the hedged profile at all times and seeks to deliver the pure beta of the benchmark. The long term historic return and risk profile of this strategy presents vary favorably on the efficient frontier, relative to both long-only equity and fixed income investments.

Appropriate for tax-exempt investors seeking to make an allocation to a hedged equity strategy, offering enhanced equity returns and lower volatility while maintaining a long biased large cap equity exposure. Since the systematic and permanent short option positions generate significant short term income regardless of whether the strategy gains or loses value in any year, taxable investors will have tax consequences, although they are not prohibited from investing. Available as a separate account with a $100,000 minimum, with a very low fee schedule and daily liquidity.

Small Cap Buy-Write – a passive hedged strategy combining a passively managed long small cap equity portfolio, hedged by selling short, near term slightly out-the-money index call options. Income collected from selling call options enhances returns, reduces volatility, buffers downside exposure, and limits appreciation potential, while maintaining a long bias. As the short options lose value with the passing of time, this strategy dominates in a sideways market environment and benefits from the passing of time. This strategy outperforms long-only equity over all market conditions except strongly rising equity markets, and has historically outperformed long-only equity over the market cycle. This strategy will maintain the hedged profile at all times and seeks to deliver the pure beta of the benchmark.

Appropriate for tax-exempt investors seeking to make an allocation to a hedged equity strategy, offering enhanced equity returns and lower volatility while maintaining a long biased large cap equity exposure. Since the systematic and permanent short option positions generate significant short term income regardless of whether the strategy gains or loses value in any year, taxable investors will have tax consequences, although they are not prohibited from investing. Available as a separate account with a $100,000 minimum, with a very low fee schedule and daily liquidity. The long term historic return and risk profile of this strategy presents vary favorably on the efficient frontier, relative to both long-only equity and fixed income investments.

Cash Reserved Put-Write – a hedged strategy combining the sale of at-the-money large cap equity index puts, with cash reserved to purchase the index, if the puts are exercised.. Income collected from selling put options is combined with interest on the cash reserve and are the two return components of this strategy. Put options often exhibit slightly higher prices than call options and as such, selling puts often captures higher cash flows than selling call options., reduces volatility, buffers downside exposure, and limits appreciation potential, while maintaining a long bias. As the short options lose value with the passing of time, this strategy dominates in a sideways market environment. This strategy will maintain the hedged profile at all times and seeks to deliver the pure beta of the benchmark. It will always hold an adequate cash reserve. This strategy outperforms long-only equity over all market conditions except strongly rising equity markets. The long term historic return and risk profile of this strategy presents vary favorably on the efficient frontier, relative to both long-only equity and fixed income investments.

Appropriate for tax-exempt investors seeking to make an allocation to a hedged equity strategy, offering enhanced equity returns and lower volatility while maintaining a long biased large cap equity exposure. Since the systematic and permanent short option positions generate significant short term income regardless of whether the strategy gains or loses value in any year, taxable investors will have tax consequences, although they are not prohibited from investing. Available as a separate account with a $100,000 minimum, with a very low fee schedule and daily liquidity.

Active Buy-Write – a hedged strategy combining an actively managed long equity portfolio, hedged by selling short, near term at-the-money call options on stocks held in the portfolio. Income collected from selling call options enhances returns, reduces volatility, buffers downside exposure, and limits appreciation potential, while maintaining a long bias. As the short options lose value with the passing of time, this strategy dominates in a sideways market environment. This strategy outperforms long-only equity over all market conditions except strongly rising equity markets. This active approach offers multiple sources of excess return: from the normal long-only sources of stock selection and sector weight variation, from excess premium collected by using individual options instead of index options, and from the small discretion we have in selling call options at slightly higher or lower striking prices.

Appropriate for tax-exempt investors seeking to make an allocation to a hedged equity strategy, offering enhanced equity returns and lower volatility while maintaining a long biased large cap equity exposure. Since the systematic and permanent short option positions generate significant short term income regardless of whether the strategy gains or loses value in any year, taxable investors will have tax consequences, although they are not prohibited from investing. Available as a limited partnership with a $100,000 minimum and monthly liquidity, or as a separate account with a $5 million minimum.

Long Stock – Long Index Puts – a hedged strategy combining an actively managed long equity portfolio, hedged with long equity index puts. The long equity component seeks to outperform the passive benchmark. The long index puts position appreciates in falling equity markets and establishes a full or partial floor on the overall value of the portfolio. This strategy maintains a long bias, limits downside exposure and participates fully in rising markets, minus the cost of the put protection.

Appropriate for institutional and private investors seeking to make an allocation to a hedged equity strategy that participates fully in rising markets while limiting downside risk. Available as a separate account with a $250,000 minimum.

Request Info >>