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PHF - PERSONAL HEDGE FUND |
MOST EQUITY OPTIONS LOSE VALUE
With that in mind, shouldn't you be selling some of them ???
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A Hedge Fund Manager's aim is to exploit the time decay in expiring options to optimize Hedge spread strategies. This site contains information for Calendar, Diagonal and Vertical spread options. These limited risk Hedge spread options, (in my opinion and I’m sure you agree since you found this site) offer the greatest risk/reward strategy available today. We have been trading these options for many years and have designed and tested a software program that produces a limited selection of Hedge spreads. Each evening our computer analyzes over 180,000 options and creates approximately 700,000 Calendar, Diagonal, Vertical Call & Put spreads and selects a limited few that are optimal to obtain the next trading day. This program has 70% success rate if executed correctly using Hedge spreads with a 2.5 or greater Power Factor. The Power Factor is the deterioration of the Sell Option to the Buy Option. A Power Factor of 2.5 means that the Sell Option will lose value 2.5 times faster than the Buy Option, so you are completely covered with a long and short on the same underlying security, but you make a profit on the Buy Option retaining it's value relative to the Sell Option. The dynamics of investing have changed for the small investor and a balanced Market Neutral Hedged Strategy has now become economically feasible, given the recent investing climate. For example: Trading software platforms are now automated; Volume on the CBOE and other options markets have grown and there is sufficient liquidity for decent trading bid/ask spreads; Transaction costs have decreased dramatically and the average trader can get options at a very competitive price. Each position costs ~ $2500 so a balanced Personal Hedge Fund can easily be put together for any type of portfolio. The advantage we have over hedge fund managers is that they can't monitor small positions like these (2K) so they are left for us to obtain. An average portfolio of 2.5 power factor positions generates between 8-10% returns a month or 35-50% more than just standard covered call writing .
OUR OPTION PORTFOLIO WAS UP 66.31 PERCENT IN 2009 |
EMAIL US - EACH MONTH WE SELECT ONE RESPONDENT FOR A COMPLIMENTARY PREMIUM SUBSCRIPTION FOR ONE MONTH
info@personalhedgefunds.com (this address is auto reply)
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