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Oxeye Buyback Option Premium Strategy (BOPS) 5x Leveraged

Investment Overview

Strategy Description

Annualising 15.21%, the Oxeye Buyback Option Premium Strategy (BOPS) is an option writing / short volatility strategy similar to insurance underwriting. Investors tend to buy options as a way of insuring their portfolios against a large market move in either direction. Large moves tend to occur infrequently and most of the time the market stays within a pre-determinable range. Therefore, options lose money for the buyer either through time erosion or by never going-into-the-money i.e., mostly they expire worthless. Investors typically overpay to own portfolio insurance strategies, a phenomenon that is well-documented in academic studies. BOPS seeks to exploit the opportunity presented by this preference, which has become more pronounced in the wake of the 2008 financial crisis and Covid-19 recession with a proliferation of expensive ‘tail-risk’ strategies coming to market. If the buyer of options most of the time loses money, then the seller of these options must be making money. The strategy sells out-of-the-money put and call spreads on equities, an operation known as “selling strangles” or “strangle writing”. Strangles are approximately delta neutral at the time of writing, and the strategy works on the assumption that the market usually stays within a definable range during the lifetime of an option. The options are sold at selected strike prices above the market for call options and below the market for put options. The options are sold for a maximum duration of 3 months. Oxeye uses a combination of Delta control and certain hedging techniques to manage the short options (which carry unlimited risk exposure to the seller) through to a profitable expiry. Please contact Oxeye for more details.
Investment Highlights

Investment Category

Investment Strategy

Investment Structure

Objective

Our Performance Goal

Return Driver - Alpha

Our Edge
Implementation of Strategy
Tactical Approach

Market Sector Exposure

Instruments Traded

Geographical Exposure

Average Timeframe

Risk Management

Investment Structure

Legal Structure

Domicile

United Kingdom

Fund Minimum Investment

Managed Account Minimum

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Prime Broker

ADM Investor Services, AMT Futures, City Index, Britannia Global Markets

ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.
ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.