AutoGULL

Return Profile

AutoGULL provides a balanced return profile, combining downside protection with upside participation. The strategy is designed to smooth out market volatility, reducing drawdowns during market downturns while still capturing upside gains.

The above graph charts the PnL of a single structure via the bold orange line. Within the light green region your holdings mimic unhedged stock. Below the blue line (long put strike) downside will be flat until the pink line (short put) where losses resume. The dark green region on the upside (short call) gains are reduced by selling the call to pay for the put spread.

The strikes of each structure will depend on market conditions, most importantly the implied volatiltiy of the underlying. Generally speaking, higher implied volatility creates structures with larger light green regions.

Every month a portion of your position will be reset into an expiration approximately 90 days away, such that you are regularly rebalancing and averaging levels.

Sample Trade Sequence

Starting with at least 300 shares of the underlying, the AutoGULL initiates options positions in three sequential months. For example at October expiration, selling calls and buying put spreads in November, December, and January.

At each sequential expiration, the expiring month is automatically closed, and rolled out to the expiration at 90 days. Put spreads that have gained value will be sold for cash, and may be used to purchase additional shares.

For calls expiring in the money, they are rolled "up and out" capturing a short term loss in options and letting the longer term stock position appreciate .

We recommended starting with enough capital to purchase 300 shares of a given underlying plus 5%. This allows for efficient position management and rolls.