ACE Strategies

Stock Index Credit Spread (SICS)

This strategy is designed to take advantage of the time decay and volatility of options via a limited risk approach…using credit spreads on the S&P 500 Index Futures.  The basic credit spread involves the simultaneous purchase and sale of options at different strike prices, puts if bullish, calls if bearish or possibly both, if in a market consolidation.  The strike price of the sold option is closer to the underlying index and commands a higher premium than the purchased option, yielding a net gain or “credit” to the account.  Hence the name, “Credit Spread.”  Generally, the objective is to retain this credit when both options expire worthless, and the positions are selected with that in mind.  There are many possible variations on this theme and the Advisor will adjust the execution according to the market conditions at the time.  The main benefits of this strategy are:  the investor’s risk is limited and quantifiable upfront. 

As with all ACE strategies, the Advisor retains the discretion to mix and match elements of other strategies or add new elements, as market conditions and his judgment dictate.  These could include, in part, going long or short outright futures, spreads, and options in the stock indices and other commodity markets.  The Advisor believes, an investor should allow a minimum of eighteen months, approximating a full market cycle, before evaluating performance of this strategy.

Stock Index Credit Spread – Minimum Starting Value Required *

Regular Program  $75,000                      

Lesser amounts may be accepted solely at the discretion of the Advisor.

*Stated minimums are net of any front-end fees.

THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.  ONE MUST BE AWARE THAT THE POSSIBILITY OF UNLIMITED LOSS EXISTS IN WRITING OPTIONS.  PEOPLE CAN AND DO LOSE MONEY.