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Hedge Fund Strategies

  • Systematic Volatility Strategies
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  • Index Trend Reversal
  • Gamma Yield
  • S&P 500 Correction Retracement

The Hercules Systematic Volatility portfolio strategies seek to generate alpha using US Equity index volatility instruments by leveraging internally developed trading models and a rules-based investment process. The portfolio aims to produce risk-hedged, excess return with low correlation to broad market indices and makes the strategy ideally suited as an overlay. The strategies effectively buy or sell insurance premia that price the uncertainty in index movement resulting from market factors.

Index Trend Reversal
(ITRS)

The ITRS is a quantitative, rules-based, short-term options strategy for investors seeking aggressive growth. It is a market-neutral strategy, equally deployable in bull and bear markets. The strategy trades calendar events such as U.S. economic releases and Federal Reserve meetings, among others. The strategy presumes that specific past behaviors of market participants will periodically recur.

The strategy uses historical data to detect and act upon the recurrence of tradable behavioral patterns within data. The strategy seeks to profit from intra-day and intra-week price trend reversals on US equity indices such as the S&P 500, The Russell 2000, and the NASDAQ 100. Indices represent broad market segments, and offer improved predictability of price behavior, largely free from idiosyncratic movements unique to individual stocks. The strategy holdings are typically held for very short periods. Most positions coincide with U.S. economic announcements such as GDP, ISM, CPI, Employment, Fed. days, etc.

The strategy is tailored for accredited investors with a high risk tolerance while seeking aggressive growth, and optionally desiring maximum liquidity. The strategy can be used standalone in a portfolio or as a risk hedging overlay to other portfolio strategies due to its low correlation to most others.

Akram Khalaf Hercules Investments

Gamma Yield

Gamma Yield is a very short-term options put and call writing strategy for investors seeking aggressive growth. It specifically focuses on the unique risk characteristics of options on their day of expiration. The strategy looks to extract the remaining non-intrinsic value remaining in the option price as the time value of the option approaches zero.

The strategy restricts itself to the use of equity index options in taking broad market risk exposure. The strategy leverages the Index Trend Reversal model in identifying trade opportunities.

The strategy is suitable for accredited investors with a high risk tolerance while seeking aggressive growth, and optionally desiring maximum liquidity. The strategy can be used standalone in a portfolio or as a risk hedging overlay to other portfolio strategies due to its low correlation to most others.

Kaushik Saha Hercules Investments

S&P 500 Correction Retracement

The S&P 500 Correction Retracement is a tactical trade strategy that capitalizes on the conclusion of the record 133 month Bull Market which began at the conclusion of the 2008 financial crisis in March of 2009.

The trade is based on the premise that the impressive April 2020 rally in US equities (and their indices,) following an unprecedented March selloff, will be short lived for numerous unrecognized fundamental reasons.

Systematic Volatility
Market volatility from recessions and financial crises have historically hurt investors’ portfolio returns and financial goals. However, Hercules Systematic Volatility Strategies equip investors with a highly liquid source of all-weather return that benefits from market uncertainty.

For questions about our hedge fund strategies or any related topic, please contact our advisory team at corporate@hercules-investments.com and one of our investment advisors will address them. The team at Hercules Investments seeks to gain your trust in meeting your investment goals and looks forward to having you as our client.