Southeast Capital Fund

We can tailor our position to our own situation and stock market outlook. Options are financial instruments that can provide us with the flexibility we need in almost any investment situation we might encounter.

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Southeast Capital Management uses options to:

• Benefit from a stock price's rise or fall without incurring the cost of buying or selling the stock outright.

• Position for a big market move even when they aren’t sure which way prices will move.

• Benefit from option price increase because of increase in volatility.

• All the time control and set limit for maximal potential losses in case of sudden turns in stock market.

 

Other Benefits include:

• Efficient, Liquid Markets

• Flexibility

• Leverage

• Limited Risk

• Guaranteed Contract Performance

• Large Investment Universe

• Tailored to Strategy

 

Efficient, Liquid Markets

Standardized option contracts provide orderly, efficient, and liquid option markets. Except under special circumstances, stock option contracts generally cover 100 shares of the underlying stock. The strike price of an option is the specified share price at which the shares of stock will be bought or sold if the buyer of an option (the holder) exercises his/her option. Option prices are set by buyers and sellers on the exchange floor, where all trading is conducted in the open, competitive manner of an auction market.

 

Flexibility
Options are an extremely versatile investment tool. Because of their unique risk/reward structure, options can be used in many combinations with other option contracts and/or other financial instruments to create either a hedged or speculative position.

 

Leverage
A stock option allows us to set the price, for a specific period of time, at which we can purchase or sell 100 shares of stock. To buy the right to control the stock in that way, we pay a price (the premium) which is only a percentage of what we would have to pay to own the stock outright. That leverage means that by using options we may be able to increase the potential benefit from a stock's price movements.

 

Limited Risk

Long strategy is the simplest strategy that exposes investment only to the price paid (the premium) when purchasing call or put option.

 

Guaranteed Contract Performance

All option contracts traded on U.S. securities exchanges are issued, guaranteed and cleared by The Options Clearing Corporation (OCC). OCC is a registered clearing corporation with the SEC and has received a 'AAA' credit rating from Standard & Poor's Corporation. The 'AAA' credit rating relates to OCC's ability to fulfill its obligations as counter-party for options trades.

 

Large Investment Universe

Our investment universe consists of nearly 1,000 options traded in global regulated derivative markets. Criteria for underlying stock or ETF should be met as well option’s liquidity and ask/bid spread. As we most of the time initiate long-term investments our portfolio is holding In The Money (ITM) options with expiration from 3-6 months. Fund is rarely taking short option position in any case it would be covered short call/put position.

 

Tailored to Strategy

Fund is applying options strategies which can generate stable returns and minimize risks. Options strategies range from complex volatility strategies to a simple covered call/put option and long call/put option approach. For tactical trading strategies our fund is applying most of the time simple long call/put strategy.