Los Altos Capital Management, LLC

Stock Index Options Program

Minimum Investment
$ 200,000
Management Fee 2.00%
Performance Fee 20.00%


-&The Stock Index Options Program primarily sells (writes) call and put options on S&P 500 Index futures monthly. The premium of options generally decays with time and expires at the expiration date so long as the underlying futures are not at or outside the strike price for which the options were written. Mr. Albert Hu may also occasionally use a small percentage of investment capital to speculate by purchasing outright calls or call spreads, or puts or put spreads under certain market conditions. However, this is expected to occur no more frequently than a few times in any given year.The volatility and changing distance of the strike price of the underlying futures can affect premiums either gradually or sharply, so risk control is paramount. Mr. Hu has conducted extensive actuarial studies on the S&P 500?s daily closing price?including data from 1991 to present?and continues to analyze ongoing data to determine the right options to write and how much leverage to use. These ongoing studies have also been used over the last year by Mr. Hu to develop a more active options management program that involves rewriting adjusted call and put options in the same month to maintain more delta-neutral positions and exert finer control over risks as well as enhance returns.Mr. Hu has been a stock trader since 1973 and was registered as a Commodity Trading Advisor from 1987 through 2006 when he began devoting his time to managing a hedge fund. He developed a stock index options writing system and re-registered with the National Futures Association in April of 2008. More detailed information about Mr. Hu and his previous programs can be found in Los Altos Capital Management?s Disclosure Document.&