The PSC THETA STOCK INDEX STRATEGY follows a two-part strategy. First, the Manager creates credit spreads by simultaneously purchasing and selling put and call options with differing strike prices and expiration dates. Using primarily S&P 500 futures contracts, the Program's assets strive to profit from price differences between the long and short options due to the volatility inherent in the market, the spread between the market and option strike prices, and, most importantly, the decrease in the time to expiration of the options. Second, the Manager purchases out-of-the money puts with differing strike prices to hedge the downside risk associated with extreme downward events in the market and significant increases in volatility, and to take advantage of time premium decay rate differences.
Kingsview deems the sale of naked or un-covered options on the S&P 500 outside acceptable risk levels and therefore does not engage in the practice. At all times the Program's assets will be long a greater number of puts than it is short. Assets reported are strategy assets.