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EOM S+P 500 Options Spreads Program

  • CTA Name : Northmen Investments Inc
  • Program Name : EOM S+P 500 Options Spreads Program
  • Start Date : 2007-04-01
  • Trading Strategy
  • Systematic : 70%
  • Discretionary : 30%
  • Fundamental : Yes
  • Technical : Yes
  • Diversified Market Strategy : -
  • Sector Specific Strategy : Yes
  • Trade Duration
  • Long-Term : -
  • Mid-Term : -
  • Short-Term : Yes
  • Multi-Term : -
  • Markets Traded
  • Stock Index : Yes
  • Interest Rates : -
  • Currencies : -
  • Metals : -
  • Energy : -
  • Grains : -
  • Meats : -
  • Softs : -

Northmen Investments Inc

EOM S+P 500 Options Spreads Program

There is no performance data for this program

Our strategy is simple and effective. We have found that a majority of the options traded in the market expire worthless. Therefore, we take the opposite side of the transaction and sell options to take advantage of the statistical likelihood that the options will expire worthless. Our program writes options far out of the money and profits by keeping the premium received if the market stays within the range that we have expected. We then purchase a related option in the same market to hedge our position or create a “spread” to manage our risk far better than outright option sellers. The program utilizes both regular expiration options (options that expire on the third Friday of every month) and End-Of-Month options (options that expire on the last trading day of every month). Most positions would require the S+P 500 to move over 15% in one direction in a few weeks for our position to be unprofitable at expiration. However, there are more factors that affect the price of our positions, such as volatility, time value, and market movement. The options we choose to sell are determined on technical analysis, historical tendencies, and economic uncertainties that affect the S+P 500.

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