The Premium Income Portfolio is an alternative strategy seeking to generate returns that are largely uncorrelated to the S&P 500 and other long-only stock indexes.
The manager seeks to profit from the natural theta, or time decay, of traded options by writing out-of-the-money put options on the S&P 500 and Nasdaq 100 indexes or tracking ETFs. The manager additionally uses a proprietary market timing model to mitigate the risk of loss. The options positions will generally be held for no longer than 15 days. In managing risk, the manager may also hedge by buying offsetting put or call options.
At this time, the Premium Income Portfolio is not available in IRA accounts.