OVERVIEW & PROCESS

Equity Options Overlay Strategies

IRON’s depth of equity options expertise stems from our deep quantitative research skills, practical trading experience in the equities and options markets, and advanced research and portfolio management techniques.

Our approach is designed to deliver attractive risk-adjusted net returns relative to alternative sources of equity market exposure.

  • Options Enhanced S&P 500 Equity Strategy (S&P Equity Plus Strategy)
  • Options Enhanced Global Equity Strategy (Global Equity Plus Strategy)

IRON’S EQUITY PLUS STRATEGY

Investment Objective

The objective of IRON’s S&P 500™ Equity Plus Strategy is to provide superior risk-adjusted total returns relative to the CBOE S&P 500® Buy-Write Index (BXMSM) by utilizing an actively managed options overlay strategy on the underlying exchange traded index fund.

Investment Philosophy

IRON’s investment philosophy stems from the belief that one can enhance the returns of a broad index portfolio by opportunistically writing and actively managing options on the underlying securities. We believe most option overlay strategies do not fully utilize the driver of performance, the underlying securities, and therefore at times unnecessarily write options on the underlying, thus capping the upside performance.

We believe the strategy’s options decision making process and active management of written options enables the underlying equity portfolio to capture a higher percentage of the upside in stronger market environments while opportunistically collecting option premiums in other market conditions, relative to its Benchmark, over full market cycles.

Investment Methodology

Selecting and Writing Options
The strategy utilizes a systematic approach in selecting options with appropriate times to expiration and probability of the option being called away. The number of option positions may correspond to a fully covered underlying position; the strategy makes no attempt to utilize additional leverage through the number of option contracts written.

Roll Strategies
The strategy actively manages written call positions through use of IRON’s proprietary roll strategies. Option positions may be closed-out prior to expiration, or written for a shorter time period based on a number of indicators such as implied volatility, underlying stock movement, pre-determined threshold of probability of option being called, realized option premium and the absolute level of option price.

Risk Management
Option writing may limit the amount of capital appreciation, especially in a rapidly rising stock market. The short-term return profile might be unattractive, hence this strategy is not suitable for shorter-term investment horizons.

PORTFOLIO PERFORMANCE

as of 3/31/2017

PORTFOLIO PERFORMANCE SINCE INCEPTION

May 1, 2011 – March 31, 2017

Disclosure:

S&P 500 Total Return Index (SPXT): Standard and Poor’s 500 Total Return Index is a capitalization-weighted index of 500 stocks’ price return and reinvested dividends. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

CBOE S&P 500 BuyWrite Index: The CBOE S&P 500 BuyWrite Index, commonly known as the BXM Index (the “Index”), is designed to measure the total rate of return of a hypothetical “buy-write”, or “covered call”, strategy on the S&P 500® Index. This strategy consists of a hypothetical portfolio consisting of a “long” position indexed to the S&P 500® Index (i.e. purchasing the common stocks included in the S&P 500® Index) and the sale of a succession of one-month, at-the-money S&P 500® Index call options that are listed on the Chicago Board Options Exchange (“CBOE”).

Management fees of 0.50% annually, our highest published fee, have been deducted from the above results. The data for the IRON Equity+ Strategies includes all discretionary portfolios in the composite. In order to be included in the composite, an account must have an initial starting balance of $100,000 or greater. Net returns reflect deduction of management fees on a monthly basis. Actual accounts are charged quarterly in arrears based on the quarter end value adjusted for capital flows. Therefore, all results shown are net of fees on an annualized basis. The advisor’s advisory fees are described in our ADV Part 2. Past performance is not indicative of future results and an investment in the IRON EQUITY PLUS Strategies involves the risk of loss, particularly with respect to short-term performance. The data assumes reinvestment of dividends and interest and includes transaction costs. If dividends and interest were not reinvested, then the above results would be considerably different. Performance results for the above are unaudited.

Investment results shown above are based upon the particular securities selected. The charts, tables, performance and other information shown are provided to you for informational purposes only and are not intended to be and do not constitute investment or tax advice nor an opinion or recommendation regarding the appropriateness of any investment. The information is based upon the particular securities selected by IRON Financial, LLC on the date appearing in the materials. The material contained in this document is for general information purposes and is not intended as an offer or a solicitation for the purchase and/or sale of any security or financial instrument, nor is it advice or a recommendation to enter into any transaction. Future returns may differ significantly from the past due to materially different economic and market conditions. Investments within portfolios, and therefore, portfolios, involve risk and the possibility of loss, including a permanent loss of principal. Actual returns for individual client portfolios managed by Iron Financial, LLC may vary and do not necessarily coincide exactly with the returns for the performance group. Actual performance of client portfolios may differ materially due to the timing related to the actual deployment and investment of a client portfolio, the reinvestment of dividends, length of time various positions are held, client objectives and restrictions, and fees and expenses incurred by the individual portfolio.

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RISK RETURN

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LITERATURE

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MANAGEMENT TEAM

 - AARON IZENSTARK

AARON IZENSTARK

CO-FOUNDER, CIO
MANAGING DIRECTOR

 - TED CONNOLLY

TED CONNOLLY

DIRECTOR, PORTFOLIO MANAGEMENT AND TRADING

 - JOE FANARO

JOE FANARO

PORTFOLIO MANAGEMENT AND TRADING

 - DR. RAMESH POOLA, PH.D., CFA

DR. RAMESH POOLA, PH.D., CFA

MANAGING DIRECTOR OF INVESTMENT AND QUANTITATIVE RESEARCH

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