How is time sold?
Theta Θ, a.k.a. time decay, is an estimate of how much the theoretical value of an option decreases when 1 day passes and there is no move in either the underlying securities price or volatility. Theta is used to estimate how much an option's extrinsic value is whittled away by the always-constant passage of time. The Time Value of an option decreases exponentially as the maturity date approaches - especially as the time to maturity passes the 30 day mark. Below is what the theoretical value of an option looks like as time passes.
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- TiM only invests in exchange-traded instruments
Sticking to these asset classes should make it easier to unwind the portfolio rapidly, minimizing the problems that many funds encountered in 2008 when their esoteric and hard-to-value assets could not be sold fast enough to give investors their money back.
- TiM allows investors to make monthly redemptions, with five days' notice. This is in stark contrast to the usual hedge fund redemption period of every three to six months.
Investors are also demanding better oversight of the trading activities of firms in which they invest. Bernard Madoff, who confessed late last year to perpetrating a vast fraud, was not technically running a hedge fund. But his Ponzi scheme has frightened those who put money in opaque investment vehicles, and created a push for better auditing and oversight.
- TiM provides complete transparency by holding your investments in your personal account which is overseen by InteractiveBrokers.com, which act a bit like private regulators.
- Investors have the control to liquidate and withdrawal their money at any time, but we recommend informing TiM with a minimum of 5 days to allow for proper portfolio unwinding by the fund manager.