The objective of the BLUENOSE CAPITAL MANAGEMENT LLC strategy is to achieve substantial capital appreciation through the speculative trading of option credit spreads on select commodity futures contracts, for example metals, currencies, interest rates and energy futures. Despite the limited exposure afforded by spread writing, this strategy entails a comparatively high level of risk. There will be times when BNC CC is not invested in the market at all and times it may be fully invested. The seller (writer) of an option risks losing the difference between the premiums received for the option and the price of the underlying futures contract that the writer must purchase upon exercise of the option. The value of options contracts primarily consist of two components, intrinsic value and time value. Intrinsic value is the amount the contract is in the money and time value is the premium received less intrinsic value. BNC CC will mainly use out of the money option spreads, thus there is no intrinsic value, only time value. Determining the trading range, the individual strike prices and the quantity of calls and puts is dependent upon the five-part process explained above. In analyzing the strike price we take into consideration prices of the options, where volatility is and how much time remains until expiration. This means the distance from the underlying and our strike price varies and can be either an at-the-money option spread or be as far away as 10 to 20% out-of-the-money, depending on market activity. There is no guaranteed safe percentage that can be used consistently. For the purpose of this program all trading will be completed on exchanges located in the United States.