Investment Overview
Strategy Description
The Short Premium Program (SPP) is designed to collect the premium that equity investors pay to reduce their risk by selling both puts and calls on the S&P 500. Ultimately, SPP profits from realized volatility being less than implied volatility. CCM controls risk in three ways: (1) The SPP never sells naked options. The risk of each trade is known at entry and the maximum open position loss is 10%. (2) The SPP sells options with less than 14 days to expiration. Since there are over 150 expirations per year, smaller position sizes can result in double-digit annualized profits. (3) The SPP minimizes the impact of volatility explosions on its short option portfolio.