The Vega Fund's portfolio positioning during July.
Memo to: Vega Capital clients
From: Scott Shuttleworth
Subject: Options trading over July
Neither the information, nor any opinion, contained on this Website constitutes a solicitation or offer by Vega Capital Pty Ltd (“Vega Capital”) or its affiliates to buy or sell any securities, futures, options or other financial instruments. Decisions based on information contained on this Website are the sole responsibility of the visitor whom we would encourage to seek relevant advice from a licenced professional.
Today’s blog is quite short but we have a few announcements.
- I’m delighted to announce that we are intending to showcase The Vega Fund in Perth at Startcon’s ‘Pitch for $1 million’ competition on the 31st of August 2018. We’re looking forward to fielding questions from investors about the markets, our portfolio and the business itself.
- I will also be meeting with Sarah Harding of WY Advice for her popular ‘Wealth Wednesdays’ segment in early August. We’ll post a copy of the video on the blog for readers as soon as it’s available.
- Finally, in addition to publishing weekly on this blog, we will also be publishing new regular content on Livewire.
Today we’re providing a brief update on some trading and the portfolio's positioning. Last week we rolled part of the portfolio which held some QQQ index puts opened back in May and redeployed capital by writing SPY index puts.
The Vega fund has two conditions in its algorithm which allow for rolling,
- Roll any option with less than 6 months to maturity; or
- Roll any option whose premium has collapsed significantly in value such that there are better opportunities elsewhere.
For the QQQ index puts, we received $787 per contract and bought them back for $240 per contract. We’ve then rolled into some 265 strike December 2019 puts on the SPY index for $1,344 per contract. These appear 5 per cent mispriced and offer a total 23.5 per cent per annum return on capital.
Since inception our fund has been bullish on the market and this has paid off. Macroeconomic indicators are green and so is momentum hence we’re still comfortable with our long market exposure. We do however have an array of hedges in place going into August to take advantage of any shocks from tariffs or the US reporting season.
The Vega Fund has now formally launched and is open to sophisticated and wholesale investors. Qualified investors may find our Information Memorandum and Application Form here however if you would like a hard copy mailed to you, please don’t hesitate to contact our office on 1800 960 707.
Vega Capital is a Corporate Authorised Representative (No. 001264482) of Alpha Securities Pty Ltd (ACN 124 327 064) AFS Licence No. 330757.