We are paid for the passage of time.
Theta Capital sells defined-risk index option spreads and holds them to cash settlement, collecting premium as extrinsic value decays to zero. Every position carries a known maximum loss before it is opened.
A narrow strategy, run the same way every session.
The firm does one thing. We sell short-dated, single-sided credit spreads on broad market indices — put spreads or call spreads, never both at once — and we hold them to expiration. Direction is selected from dealer positioning and gamma exposure rather than forecast, and we require trend agreement before a position is opened. We do not sell into falling knives.
Strike selection is governed by distance, not by premium. The question asked before every entry is how many strikes of protection sit between the short leg and the market, and the side offering more cushion is the side we take — even when the other pays better.
The strategy is capacity-constrained by design. Index options offer deep liquidity, but a defined-risk book sized to a fixed fraction of capital has a natural ceiling. We would rather close the fund than degrade the execution that produces the return.
Four controls, applied in order, every time.
Defined risk at entry
Maximum loss equals the width of the spread less the credit received, and it is known before the order is sent. The long leg is never omitted to improve the credit. There is no naked exposure in the book at any time.
Sized to the book, not to the trade
Premium collected targets a fixed fraction of deployable capital. Contract count flexes to meet that target; premium per contract does not. This removes the incentive to reach for richer strikes when the market is quiet, which is precisely when reaching is most expensive.
A resting stop, not a hope
Positions are closed at a fixed multiple of the credit received. The stop is working before the position is live and is owned by the execution system, not by discretion. A loss taken on schedule is a cost of business; a loss negotiated with is an unbounded liability.
Cash settlement, European style
Index options settle in cash and cannot be exercised early. This structurally eliminates the after-hours assignment risk carried by ETF options, where a position closed at the bell can still be exercised against you hours later. The tail is removed by instrument selection rather than managed by vigilance.
Performance is not published on this site.
Theta Capital currently trades proprietary capital. The track record, its methodology, and monthly reporting are provided on request following accredited investor verification. These materials are deliberately absent from this page rather than concealed behind it.
Structure, as it stands today.
Irvine, California 92614