OUR STRATEGIES
Income and resilience through disciplined options writing
As income-focused advisors, we offer two strategies tailored to different client objectives. Both are rooted in the same fundamental rigor, and both generate consistent cash flow.
Primary Strategy
Options Strategy
Our Options Strategy is the core of what we do. It generates cash flow for your account in three distinct ways, all working together to create consistent income while preserving capital.
Cash-secured put writing: We sell put options on stocks we want to own, meaning your account has the full cash necessary to cover every position. Your account is never leveraged. By selling a put, we generate income and achieve a lower cost basis than buying shares outright. We love selling puts on high-quality companies - it gives us the ability to name our price and get paid to wait.
Covered call writing: If shares are assigned to us, we sell call options against those shares, generating additional income. The primary trade-off is capping upside if the stock is called away.
Dividends: One of our primary considerations when analyzing companies as potential option candidates is a sustainable, growing dividend so you're paid to wait if shares are assigned. We often strategically sell puts that would put us into a stock before it goes ex-dividend.
THREE INCOME STREAMS
OPTIONS PREMIUM INCOME
Cash-secured put options and covered call options generate the primary income for your account. Premiums are collected upfront.
DIVIDEND INCOME
Sustainable, growing dividends from high-quality companies. You're paid to wait while holding assigned shares.
INTEREST ON CASH BALANCES
Cash securing your put positions earns competitive interest rates through Interactive Brokers.
You also earn interest on the cash used to secure the put options. Our custodian, Interactive Brokers, offers competitive annual yields on cash balances, meaning your capital is working for you even while it secures your positions.
We write options to express an opinion on the underlying stock, not because we believe the option itself is over or undervalued. We do not believe we have built a better Black-Scholes mouse trap.
“The strategy is simple and straightforward. It is also time-consuming. But the risk tolerance has been very manageable, due to the fundamental and valuation considerations of our team.”
Flexible Strategy
General Strategy
The General Strategy is more flexible than the Options Strategy. It allows positions to be established by any means necessary - direct share purchases, short sales, and options contracts - giving us full latitude to pursue the best risk-adjusted approach for your objectives.
The General Strategy also generates consistent options income, though the income level will typically be lower than the dedicated Options Strategy. It's designed for clients who want broader flexibility in how we express our investment views.
WHAT BOTH STRATEGIES SHARE
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Concentrated portfolios of 10-15 holdings
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No attempt to track or outperform an index
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Separately managed accounts with full transparency
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Discretionary management so we can act when opportunities arise
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Monthly account statements provided by Interactive Brokers and annual performance reports provided by Grammatical Capital