and their option strategy didn't work exactly they way their model predicted it would... Since all the options are struck on day 1 and are exchange as a counter party ( my assumption) why it would not work? unless OCC goes out of business !
I think it's very unlikely that it will fail. But they are not providing a contractual guarantee. They are concerned about systemic risk, among other things. And the prospectus also says this: The Fund’s investment objective is not a fundamental policy, and therefore may be changed by the Board without shareholder approval. Did you follow the debacle with USO when the price of oil dropped below zero? USO is a passive ETF that uses futures to track the price of oil. When the spot price of oil dropped below zero (you had to pay someone to take it off your hands, because of the storage costs), the ETF was unable to maintain their stated strategy of liquidity problems and position limits. They had to get really creative, and they basically had to start actively managing a fund that was advertised as passive. This did not work out very well LOL But the fund is still in business. I think they settled a class action lawsuit, and modified their strategy and their prospectus.
But here the Option Collar is either established or not achieved on day 1 , it is not like the USO which was just a futures position I am not saying that this is a great product ,