- This portion of the portfolio seeks to utilize a combination of covered calls and cash-secured puts to target an annualized return of approximately 20%
- The portfolio is allocated based on a projected annualized return basis along the following guidelines:
- Projected Annualized Returns of 10-20%: 27.5% of Portfolio
- Projected Annualized Returns of 20-40%: 35% of Portfolio
- Projected Annualized Returns above 40%: 25% of Portfolio
- Cash Allocation of 2.5%
- In order to keep to these allocations, the portfolio is rebalanced after options expiration on a monthly basis
- If a position is closed between options expiration days, then a new position is established based on the current projected returns of the remaining positions
Naked Put Investing Portfolio (NNIP):
- This portion seeks to use naked put options to act as an income generating hedge for the CCIP
- Naked puts will be sold with an intended exposure of approximately 150% of the existing CCIP
- Target returns for the naked puts will be an average of a 5% annualized return, with downside protection of at least 20%
- The options in this portfolio will generally have lifetimes of at least 3 months, and at the most be 1 year in length
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