SteadyOptions Fund Launched

Discussion in 'Announcements' started by Kim Klaiman, Aug 21, 2017.

  1. SteadyOptions is an options advisory service that has produced over 80% Compounded Annual Growth Rate in the last 5 years. You can see the service performance here.

    For the past several years many of our members have been requesting a vehicle in which the Steady Options strategies could be traded. In order to meet that demand, we are pleased to announce that Lorintine Capital has launched the Steady Options Fund I. This is a pooled investment vehicle that will trade the Steady Options strategies. A copy of the Fund overview and/or full offering documents is available upon written request. Requests should be directed to either Christopher Welsh or Jesse Blom at cwelsh@lorintinecapital.com, jblom@lorintinecapital.com, or via phone, 214-800-5164.

    We have a target start date of September 1, 2017 to start trading in the Fund. The Fund is limited to the first ten million dollars in subscriptions received for the first year, after which the Fund will be opened to additional investment as market conditions merit. If the Fund is oversubscribed, preference will be given to investors in the following order:
    1. Beta Test members;
    2. Qualified Clients;
    3. Accredited Investors; and then
    4. Up to 15 non-accredited investors.
    If you have any questions regarding the Fund, please do not hesitate to contact Lorintine Capital.
     
    Last edited: Aug 22, 2017
  2. mskl

    mskl

    80% compounded??? basically 19 times your money every 5 years

    Wow. Invest $50K: 10 years later you have $17.5 million. 20 years later and you have $6.3 BILLION

    Makes you wonder why anyone would need to start a fund when you can just go do it yourself....

    things that make you go hmmmmmm
     
  3. newwurldmn

    newwurldmn

    His website says that he doesn't recommend investing more than 100k in the steadyoptions strategy but yet his fund will close at 10mm.
     
  4. SteadyOptions returns are based on real fills backed by screenshots of my broker fills. However, they are based on 10k portfolio and exclude commissions. Obviously those returns are not scalable to multi million dollar accounts.

    The fund "official" target Returns is double digit annual returns, net of fees , with low correlation to the S&P 500. "Unofficially" we believe that 2% per month is a reasonable target (no guarantees of course).

    P.S. You can read My 2015 Personal Account Return: 80.2% article and see that those returns are real.
     
    Last edited: Aug 22, 2017
  5. newwurldmn

    newwurldmn

    Seriously speaking now : I would have concerns about liquidity. Single stocks get pretty thin once you are trading 1000+ contracts without access to liquidity providers and IDB's. To earn the returns you do (as you calculation in your individual pnls), you will need those relationships. Your transaction costs will go up significantly.

    Have you accounted for this in your prospectus?

    Especially as your last few trades appear to be long vol hoping for a repricing ahead of earnings. Or they are extremely short dated options and you are trading the timevalue.
     
  6. Those are very valid concerns, and all of them are addressed in the fund documents. We did a beta phase for the last 5 months and did not jump to the fund right away. Only after making sure we can address those concerns, we are starting the fund.

    The fund will be trading mostly the most liquid vehicles, reduce allocation per trade and have more trades than SO model portfolio. More details can be read in the fund documents.

    To reduce costs, we switched from TOS to IB. And yes, in some cases we will have direct access to the floor. But this is also one of the reasons why we limit the fund size to $10M at this point.
     
    Last edited: Aug 22, 2017
  7. newwurldmn

    newwurldmn

    Fair points but, my concerns would be :

    In the case of #1 : that will help but it could affect your future returns as the less liquid stuff could have more systematic edge.

    In the case of #2 : if you have more trades then you are tweaking your signal process and that can produce results very different than your past.

    In the case of #3 : you might be able to source better execution but you will have a more difficult time exiting without taking basis risk.
     
  8. #1: Not necessarily. We made some very good gains with stocks like GOOG, AMZN, NFLX, TSLA, FB - in fact, those are among our best candidates.

    #2: SO has 10% allocation which means we are limited to 7-8 trades at the same time. There are many times when we have more good candidates, but cannot trade them because the model portfolio is fully allocated. Fund will not this problem - it will be able to spread the allocation between more trades to help to address the liquidity issue.

    #3: Fair point - this is why we are fully aware we will not get 80% annual return like SO model portfolio did.
     
    Last edited: Aug 22, 2017
  9. newwurldmn

    newwurldmn

    My counter response:

    #1, removing the other stocks could change your portfolio dynamics (a common problem as funds get bigger).

    #2, if you are under allocating to create diversity - you are still diversifying over the same few underlyings (see #1). Will this mean your core signals are going to change?

    #3 agreed.

    When I first saw your post I was intrigued. You might have thought this through, but it's hard to add 1000x to your portfolio size and maintain the same strategy. Especially when you start crossing liquidity thresholds.
     
  10. #1: We are not removing other stocks. We traded some of the less liquid stocks in the beta with no issues. But yes, some of the stocks are not suitable for larger scale trading. We found this during beta and have removed them from the candidates list. Still plenty left.

    #2: No, why? Core signals will still remain the same. Still plenty of stocks to trade, and for the same stocks we can still have a lot of flexibility. Which means that fund returns will be actually less volatile due to higher diversification.
     
    Last edited: Aug 22, 2017
    #10     Aug 22, 2017