60/40 Financial focuses on credit spreads where we actually receive money for selling options on certain indexes. The odds are that the options will expire worthless and we will keep the premium received at the initiation of the trade. This “technique” is nothing new, but we have our own twist on managing risk while collecting premium. Since the The Commodity Futures Modernization Act of 2000 (CFMA), selling premium has been an excellent way to actively manage a portfolio while not getting hit with short-term capital gains.

We restrict the positions in our model portfolio to broad-based indices rather than individual stocks or commodities. This restriction removes greatly the exposure to risk by individual company news, litigation, and other catalysts. In addition, through our use of risk-defined positions, we reduce both the frequency and costs commonly associated with actively managing an account.

If you have any questions or would like to register for 60/40 Financial’s education, please contact us.