Options Mechanics: Pros, Cons and Expectations
Options are a key ingredient in Measured Risk Strategy Fund. Yet they aren’t always an easy concept to understand. That’s why we’re sharing our short and simple, animated Powerpoint presentation, “Options Mechanics: Pros, Cons and Expectations” for you to help your clients understand how we measure risk.
Click below to download the presentation, and be sure to watch it in Slide Show mode to view the animations.
The Fund employs various strategies to achieve the objective of capital appreciation and income. The primary tool to achieve this objective is the use of derivatives, primarily options. Options involve risk and are not suitable for all investors. The use of options and the resulting high portfolio turnover may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those options. The Fund may experience losses that exceed those experienced by funds that do not use derivatives, options and hedging strategies. Purchased put or call options may expire worthless and may not deliver the expected return due to time value decay. Written call and put options may limit the Fund’s participation in gains and may amplify losses in market declines. The Fund’s losses are potentially large in a written put or call transaction. If unhedged, written calls expose the Fund to potentially unlimited losses.
The Fund is nondiversified and as a result, changes in the value of a single security may have a significant effect on the Fund’s value. Other risks include U.S. Government securities risks and investments in fixed income securities. Typically, a rise in interest rates can cause a decline in the value of fixed income securities or derivatives owned by the Fund. Volatility Exchange Traded Products (ETPs) may have significantly greater daily movements that that of the broad US equity markets. Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges. ETPs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in stocks. ETFs are subject to specific risks, depending on the nature of the Fund.
Past performance is no guarantee of future results.
Investors should carefully consider the investment objective, risks, charges and expenses of the Measured Risk Strategy Fund. Mutual funds involve risk, including possible loss of principal. There is no guarantee the Fund will meet its objective. This and other information is contained in the prospectus and should be read carefully before investing. For a prospectus please call Measured Risk Portfolios at (855) 907–3407 or at www.mrp.fund. The Funds are distributed by Northern Lights Distributors, LLC, member FINRA / SIPC. Northern Lights Distributors, LLC is not affiliated with Measured Risk Portfolios, Inc.