Payoff structure
The contractual rights and obligations, strike price, maturity and possible exercise or assignment.
Options
Options
Options
Understand the structure behind the exposure.
Options form part of SilverCape's investment interests in public markets. Our approach begins with the contract, its underlying asset and the way changes in price, time and volatility affect the position.
An options strategy is assessed together with its funding needs, liquidity and potential losses. A familiar strategy name does not replace an understanding of the obligations and risks of the actual position.
Options analysis
Four connected considerations
Time and volatility
How the value of a position responds to the passage of time and changes in market expectations.
Liquidity and execution
Trading depth, bid-offer spreads and the ability to adjust a position under difficult conditions.
Portfolio exposure
The relationship to existing holdings, including concentration, funding commitments and losses under alternative scenarios.
Options involve significant risk. Some written options positions can create losses greater than the premium received.
EXPLORE FURTHERInvestment Philosophy