Vantage Capital Management : VCM Growth Program

Summary

The VCM Growth Program writes both put and call option contracts on the S&P 500 index as its primary investment vehicle. Although the trading methodology is technical and statistical in nature, consideration is given to the overall fundamental condition of both domestic and global markets.

Investment Strategy

The Program avoids forecasting specific market direction, but rather takes both sides of the market and derives profits as a function of Theta, the “time decay” component of options, and of volatility which has a constant effect on the value of the option. The VCM Growth Program short options will typically be hedged to protect downward market moves, however, may not be hedged 100% of the time. The Growth Program looks to be a little further out of the money when writing options than the previously offered Aggressive Program. In addition, the Growth Program generally uses less leverage than the previously offered Aggressive Program. Although there is no guarantee that a particular account will experience any profits, the Advisor seeks to maximize returns, while balancing risk, to target an annualized return objective of 10% to 20% and greater.

Risk Management

The greatest risk entailed with the Growth Program and Moderate Program trading strategies occurs during periods of extreme S&P 500 Index volatility, specifically periods with large one directional movement. Due to the probability that major/sudden downside movements of 20% or more in the S&P 500 Index is far greater than to sudden 20% upward movements, the trading strategies employed by the Advisor are more cautious regarding major downward movements contrasted to upward movements in the S&P 500 Index. In addition, the Growth Program generally adds hedging to reduce risk and the Moderate Program adds hedging to reduce risk.