How do Fulcire option strategies work?
Let’s use the following simplified example:
Assume XYZ stock is selling at $100 per share, has an annual dividend yield of 5% and has a three month call option with a strike price of $100 selling for $3 per share. Then the following would apply for the next three month period.
On day one:
Buy 100 shares of XYZ for $10,000 and sell one call option for $300 or a net outlay of $9,700.
At some point during the three month period you will collect a dividend of $125.
At the end of the three month period if the shares of XYZ are selling above $100 per share the purchaser of the call option will exercise their right and force you to assign the shares to them for the stipulated price of $100. Your gain on the transaction will then be limited to the option premium and dividend that you received $300 plus $125 for a total of $425. This 4.25% for three months equates to a 17% annual yield..
Alternatively, if the price of XYZ is selling below $100 per share then your gain will be calculated by the amount that XYZ exceeds $95.75 per share which, is the breakeven price.
Who holds title to the assets invested?
All assets remain in the name of the investor. Investors may choose any custodian that will honor a power of attorney limited to trading the account by Fulcire.
Is leverage employed?
No. There is no borrowing or margin utilized.
Is there a lockup period?
No. The arrangement is cancellable at any time with appropriate notice.
What about fees?
Fees are charged at the rate of 1% per annum on assets invested. Contingent fee arrangements can be made for qualified investors with accounts in excess of $1,000,000.
What is the minimum investment?
I have employer stock trading restrictions, can those be managed?
Yes, since all accounts remain in the name of the investor Fulcire can adjust to any investor guidelines.
How do I get more information?
A prospectus is available upon request. See information under contact us..