Art

Managing the Risk Return Profile of the Investment Strategy

Time period for each trade – A weekly investment cycle has fewer unknowns than a monthly, quarterly, or annual cycle


Capital allocated to the trading strategy is based on a target return/risk profile established for the Fund


Allocated capital may be adjusted by the adviser in an attempt to take advantage of increasing market opportunities or to minimize risk


The strike price of the options is determined by the strategy's risk controls – a decision to place a trade is then determined based upon the premium available at that strike price


Trading positions will be closed or reduced:


To attempt to lock in profits if they are in a target range


If the cost to close the trades reaches a predetermined level


To attempt to mitigate loss scenarios

 

 

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