Investor Profile: Aries is a covered call strategy designed to differentiate from a standard stock portfolio that generates more income by selling call option premium against an underlying investment instrument
Goal: To collect premium paid by the option buyer. In this case, the long position in underlying ETF is said to provide ‘cover’ since the shares are guaranteed delivery to the option buyer if they exercise the right to buy. In short, we utilize a covered call strategy that will forgive the chance of unlimited capital gain for a higher probability of total return.
The covered call strategy can lower volatility and reduce uncertainty of the returns. It will also provide cushions and generate more income while the market goes down. However, it is important to understand that the risk is the same as owning the ETF, minus the credit for selling the calls. This strategy would be especially suitable for an investor that expects the S/P 500 to be neutral, or are modestly bullish on the index ETF. Minimum investment is $50,000.