Harbor Financial LLC : MAP (Fund Performance)

Summary

Harbor Financial, LLC, seeks to achieve capital appreciation by engaging in a program of premium collection, by selling or writing options spreads on stock index futures traded on the Chicago Mercantile Exchange. An options spread consists of the simultaneous sale and purchase of options of different exercise prices and/or expiration months. In a spread, the purchased option acts as a hedge or protection against a sudden increase in the value of the sold option. This technique profits as the sold option’s value declines over time. Profit is captured when sold options are repurchased at a reduced value, or when they expire worthless, allowing the investor, to retain the original sales proceeds.

Investment Strategy

Harbor Financial, LLC, seeks to achieve capital appreciation by engaging in a program of premium collection, by selling or writing options spreads on stock index futures traded on the Chicago Mercantile Exchange. An options spread consists of the simultaneous sale and purchase of options of different exercise prices and/or expiration months. In a spread, the purchased option acts as a hedge or protection against a sudden increase in the value of the sold option. This technique profits as the sold option’s value declines over time. Profit is captured when sold options are repurchased at a reduced value, or when they expire worthless, allowing the investor, to retain the original sales proceeds.

Risk Management

Harbor Financial places a strong focus on risk management with the goal to provide consistency of returns and to mitigate the extent of the losses that will occur. We do not sell “naked options”. Options sales are generally executed as “spreads” in which the options sales are paired with the simultaneous purchase of other options as a hedge. Although our strategy is narrowly focused, trades are entered into on a continuous basis across different exercise prices and expiration months for diversification purposes. Once trades are entered, we employ strict risk management procedures which are triggered by total portfolio exposure rather than individual position value. Supported by sophisticated options analysis software and many years of options trading experience, Harbor Financial will determine the correct portfolio adjustment, with changing market conditions.