Steady Options Fund

Steady Options Fund

  • Steady Options (SO) Fund is a speculative options trading strategy that trades straddles, strangles, calendars, earnings events, volatility, iron condors, naked puts, and more.
  •  SO Fund was created through the options community at http://www.steadyoptions.com.
  •  SO Fund operates with high volatility and should be considered for small total portfolio allocations.

The Fund's primary strategy is to trade options around earnings of underlying stocks. These trades take the form of straddles, strangles, calendar spreads, condors, and other similar option strategies seeking to profit from the change in volatility and the underlying price movements which typically occur around earnings periods. These trades can be broken down into:

1. Pre-earnings straddles, strangles or reverse Iron Condors. This strategy is based around aiming for consistent and steady gains with short holding periods. The trades will always be closed before earnings to avoid the collapse of Implied Volatility. The trades can make money when volatility goes up at a faster rate than option premiums decay, which often happens as earnings dates approach;

2. Pre-earnings straddles or strangles (longer dated). This strategy is the same as the first, except that the trades are entered further in advance and paired with a short, out of the money, strangle. This strategy acts as a hedge in times of low volatility;

3. Volatility trading. The Fund employs several trades on VIX, VXX, and other associated ETF options which profit from the change in volatility or the inherent decay present in the ETF's;

4. Pre-earning calendars, double calendars, and triple calendars whose options expire before or after earnings. The Fund also trades calendar spreads around earnings. If the options expire after the earnings announcement, in the ideal situation, the short term options will lose value faster than the longer term options, causing the calendar spreads to increase in value. If the short options expire before earnings the trade behaves similarly to a traditional calendar, with the added benefit of the longer dated option gaining the support of the volatility increase of the upcoming earnings. The second version of this trade is more sensitive to moves in the underlying stock price, so less volatile stocks tend to be used; and

5. Other option strategies. The Fund will implement other option strategies from time to time, including iron condors, butterflies, and other strategies, typically using index products. These trades are typically entered into as hedging positions or to take advantage of ongoing market price trends.

For more information regarding the Fund, including performance information, the full private placement memorandum, disclosure documents, presentations, and subscription documents, please click below.

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