The Advisor currently engages in a program of buying and selling or "writing" options (puts and calls) on a broad range of futures markets within the United States. The current market scope for the program encompasses thirteen futures markets within the United States. The Advisor will extend the scope of markets within The Positive Theta Program and as such, reserves the right to place trades in any commodity futures contract, or option contract thereon, on any exchange, at the Advisor's sole discretion.
The trading strategy utilized by the Advisor is proprietary and confidential. The following description is of general necessity and is not intended to be all-inclusive.
The Advisor uses an approach to trading that relies heavily on selling or "writing" options on commodity futures markets. The Advisor may also, from time to time, purchase options and may employ the use of hedge strategies such as option spreads, strangles, straddles, or may purchase or sell futures contracts to offset an open option position.
The implementation of The Positive Theta Program relies on a systematic deployment process moderated by a qualitative overlay. The Advisor will utilize the following in the qualitative process before engaging systematic trade allocation. 1) charted prices, 2) trade volumes, 3) price momentum, 4) underlying market volatility measurements, 5) the price and volatility of various options, both in absolute terms in relation to their historic levels, and in relative terms comparing the prices and volatility of puts to the prices and volatility of similar calls, and 6) fundamental considerations including the condition of the global market, the trend and volatility of the markets, supply and demand, as well as business and economic factors, governmental policies, weather, and other worldwide events, which can influence the markets.
Capital is deployed across two trading components. The "Core Allocation" and the "Macro Allocation". The Core Allocation presides over the energy market complex and utilises hedging and risk management methods appropriate for those markets. The Macro allocation contains a subset of ten allocation principles with broad exposure to thirteen of the most liquid futures contracts.