About Us

AlphaTheta Capital is an asset management firm specializing in investment income strategies. The portfolio holds a group of income generating securities such as mortgages, REITS, MLPs and, for example, closed end funds trading at discounts to their net asset values. The manager has extensive knowledge of the hedge fund industry as well as expertise in formulating effective options strategies. The very largest holdings of superior funds have been shown to provide substantive outperformance and these holdings are disclosed to the public albeit on a delayed basis. This data combined with the flow of institutional unusual options activity provides a fertile source of potential ideas.

In addition to covered call writing and simple vertical options spreads, other strategies such as diagonal, calendar, various condor and butterfly (ratio and broken wing) are also utilized. One primary strategy consists of purchasing the stock, selling an out of the money call option allowing for sufficient upside profit, purchasing one at the money put and selling two out of the money puts at a lower strike providing a specified amount of downside protection up to a level at which the manager is willing to own the stock.

Another cost reduction strategy is to purchase a longer dated in the money call option on stocks against which short dated call options at higher strikes are repeatedly sold. Implied volatility (IV) plays a key role in helping to formulate strategies that are short high IV options benefiting from theta decay while being long low IV options. The manager continuously monitors gross and net exposures to maintain appropriate short positions and hedges with the goal of generating superior risk adjusted returns.