Opes Capital Group, LLC : Opes Capital Group Trading Program

Summary

The Opes Trading Program trades the equity markets (trend and counter trend) using options on the S&P e-mini futures. Some traders use stocks, others futures; we use options. Our strategy is discretionary and based on proprietary technical models, a systematic capital deployment program, and a dynamic risk management system.

Investment Strategy

We begin with a 3-6 month economic and market outlook, then break it down into 4-6 week trading windows. This process encompasses analyzing current and expected economic conditions, historical precedent, current and expected volatility, various technical indicators and multiple proprietary technical models. Current implied volatility and any immediate expected changes are incorporated into the short term focus when selecting optimal strikes to add to the portfolio. Potential trades are filtered through a risk management model which includes value at risk and margin considerations. The program’s focus is the S&P 500 index to minimize the portfolio's unsystematic risk. As option/volatility sellers, our risk framework is crucial to our program’s sustainability. The trades are executed according to the Portfolio Managers instructions. Positions are monitored daily and adjusted if market view changes or if the position values are adversely affected by market fluctuations, violating predetermined risk management criteria.

Risk Management

Implicit risk management through systematic capital deployment. Discretionary parameters set by peak to trough analysis. We hedge directly by using vertical spreads when trading puts. Additionally, our positions have low delta and strict position limits to counter risk. As a result, in such markets our maximum loss is defined upon entry. Spreads also help mitigate our gamma risk.