AFB LLC : Multi - 4 Options Program

Summary

The Multi-4 Options Program is a discretionary short, medium and long- term options trading program that seeks to generate absolute returns by taking advantage of price ranges in four sectors in the futures markets which are the energies, metals, grains and currencies.

Investment Strategy

The program consists of writing short (selling) call and put option positions with the goal of profiting from time decay. The goal is a monthly return of 1-2%, although individual account performance will vary depending on the timing of entry into the program. Depending on liquidity, option orders will either be placed directly to the appropriate trading pits or placed electronically.

Risk Management

While risk can never be eliminated, when necessary, the program buys at or near at-the-money option puts and calls to protect core trades with the goal of minimizing overall risk. Futures contracts may be incorporated to help reduce risk in volatile markets. In times of increased volatility, the program may establish a “gamma long” position of long puts and calls to become long premium, attempting to take advantage of the increased volatility spikes in the market while minimizing risk exposure. Also, in times of increased volatility the program may elect to have no option short positions to minimize risk.Trade positions are monitored daily in order to assess and manage risk using volatility, time and movement of the underlying market in relation to changing market signals.