GrowthPoint Investments

The Advisor will be executing trades that will create 'Butterfly Spreads' and 'Skip-Strike Butterfly Spreads'. A Butterfly Spread involves the creation of two long or short positions with different strike prices separated by a short or long position that has a strike price, which falls between the prices of long or short position at the ends of the spread. A Skip-Strike Butterfly Spread is structured in a similar way, but it uses call options that are neutral or bearish (a tendency to decrease in value) and put options that are neutral or bullish (a tendency to increase in value).

Some of the Advisor's trades will be configured to create vertical ratio spreads to defend other trades which may be vulnerable to adverse market pressure. The Advisor will also be rolling call spreads and put spreads that are closer to being in-the-money to delivery months that will expire later (i.e., closing one position and opening a similar position in a delivery month that will expire later. In other instances, the Advisor will be losing positions and opening similar positions that are further out-of-the money to decrease risk.

The Advisor may configure other option positions besides those described above when its analysis of various trading patterns in the market warrant different strategies. In most cases, the Advisor will be liquidating its long and short positions before option contracts expire. Anyone who buys far out-of-the money options generally will be paying a premium that is less than a premium he would pay to buy an option that is less far out-of-the-money.