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Option Nerd Spread Trading

  • CTA Name : Summa Capital Management LLC
  • Program Name : Option Nerd Spread Trading
  • Start Date : 2002-05-01
  • Trading Strategy
  • Systematic : -
  • Discretionary : 20%
  • Fundamental : -
  • Technical : -
  • Diversified Market Strategy : -
  • Sector Specific Strategy : Yes
  • Trade Duration
  • Long-Term : -
  • Mid-Term : -
  • Short-Term : -
  • Multi-Term : -
  • Markets Traded
  • Stock Index : Yes
  • Interest Rates : -
  • Currencies : -
  • Metals : -
  • Energy : -
  • Grains : -
  • Meats : -
  • Softs : -

Summa Capital Management LLC

Option Nerd Spread Trading

There is no performance data for this program

Program Description: SCM/OSTP was organized to seek substantial capital appreciation while minimizing risk. Any current income will be incidental to SCM/OSTP's primary investment approach. SCM/OSTP employs a series of proprietary models and may utilize a broad cross-section of options and futures trading strategies to take advantage of certain market conditions and trading opportunities. SCM/OSTP intends to primarily utilize options writing (i.e., selling time premium) on stock index futures options in an attempt to achieve its investment objective. SCM/OSTP's general trading approach can be described as a net options selling strategy known popularly as credit spreads (i.e., put credit spread and/or call credit spread, or in combination known as covered strangles). SCM/OSTP believes that markets in which SCM/OSTP intends to speculate spend a considerable amount of time in definable trading ranges and make significant moves in short periods of time. Through options writing and proprietary position scaling, adjustment mechanisms and money management techniques, SCM/OSTP will attempt to capitalize on this technical feature of markets by selling options and profiting from time value decay as most options eventually expire worthless. The principal of SCM/OSTP has experience trading options and intends to use a number of option strategies for SCM/OSTP, primarily net selling, but may include long and short positions in the underlying futures contract, purchasing calls and/or puts, vertical and horizontal spreading, and naked and covered writing. As market conditions can vary, so will the appropriate options strategy for a given situation. For example, writing a covered option may make sense to SCM/OSTP in one situation, and not another. Hedging in options may reduce the risks of both short selling and taking long positions in certain transactions. SCM/OSTP recalculates and adjusts SCM/OSTP hedges as market conditions warrant. When entering into transactions involving futures and options on futures contracts, SCM/OSTP will comply with applicable regulations and requirements of the Commodities Futures Trading Commission (the "CFTC"). The use of futures contracts and options on futures contracts as a hedging device involves several risks. There can be no assurance that there will be a correlation between price movements in the underlying securities or index on the one hand, and price movements in the derivatives used as a hedge, on the other hand. Positions in futures and options on futures may be closed out only on the exchange or board of trade on which they were entered into, and there can be no assurance that an active market will exist for a particular contract or option at any particular time. SCM/OSTP intends to maintain sufficient excess margin in SCM/OSTP managed accounts through effective risk management and efficient use of capital in the application of limited risk option and option and futures spread trades, so strategies may be defended in the event of large adverse moves, which is one of the essential keys to long term success at trading.

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