T-Portfolio

Vision Advisors offers the Total Portfolio in which it may employ any of the strategies that it uses in managing the other portfolios offered, such as the Equity and Balanced Portfolios and the Stock Put Writing and Stock Put Credit-Spread Option Program. In addition, Vision Advisors may engage in various option strategies including writing naked call options, entering into credit call spreads, entering into short stock positions and/or taking other actions in a client’s account including the using margin to leverage the assets in a client’s account. This portfolio entails a HIGH DEGREE OF RISK and requires Level 5 option trading (the highest level) along with margin access.

Clients in this portfolio must have “Speculation” or “Capital Appreciation” as their primary objective and their risk tolerance must be “Aggressive” or “Speculative.” Clients should allocate no more than 20% of their total investable assets into this portfolio. (Vision Advisors has additional portfolios that could be utilized for the balance of a client’s investable assets.) Clients who are age 65 or older should not allocate more than 15% of their investable assets into this portfolio.

In this portfolio, the manager is seeking aggressive market returns. Please note that Vision Advisors will have broad discretion to employ many aggressive market strategies in order to seek profits. Vision Advisors believes that this portfolio has the flexibility to engage in activities that are specifically geared to events (either short-term or long-term) that are taking place in the market. For example, Vision Advisors may employ a “tactical tilt” to exploit a current situation in the market or utilize a complex options strategy due to a severe move in an underlying stock or the market in general.

Vision Advisors may use various strategies, including but not limited to the following:

  • All of the strategies detailed in the Stock Put Writing Program and the Stock Put Credit-Spread Option Program listed above;
  • Selling a short (i.e., uncovered) call position providing an opportunity for profit, but also involving unlimited risk of loss as the underlying stock price can rise substantially above the option strike price; and
  • A short straddle, which is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premiums of the put and call, but the straddle has substantial risk of loss if the underlying security either drops substantially below the strike price of the put or soars above the strike price of the call. This strategy is called non-directional, because the short straddle makes a profit when the underlying security only has small changes in price before the expiration of the straddle.

These strategies involve the use of leverage and margin. Please review the following important risk disclosure statement regarding the use of margin in a client’s account.

Clients who open margin accounts will be provided with the full margin disclosure documents. Margin clients should be aware of the following:

  • They may lose more funds than are deposited in the margin account;
  • VFM, VBS or third-party firm can liquidate any short option position or any other security to cover a margin deficiency;
  • VFM, VBS or third-party firm can liquidate positions without first contacting the client;
  • Clients are not entitled to choose which securities or other assets in their account(s) are liquidated or sold to meet a margin call;
  • The loss on a given short spread is limited to the difference between the two strike prices less the net premium received, after execution charges and any other transaction costs;
  • VFM, VBS or third-party firm can increase its “house” maintenance margin requirements at any time and are not required to provide advanced written notice to clients; and
  • Clients are not entitled to an extension of time on a margin call.

Clients in the Total Portfolio will also have to be approved for writing uncovered options. Clients will need to be approved for Level 3 options trading in order to write puts and for Level 4 options trading to write uncovered puts. Clients who utilize puts on indexes must be approved for Level 5 options trading. Those clients who open option accounts will be provided with a copy of the brochure Characteristics and Risks of Standardized Options (and any supplements) prior to being approved to trade options. Clients will also receive margin and uncovered options disclosure forms. Please note: Options involve risk and are not suitable for all clients.

*Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (with 1997 through 2012 supplements)November 2012 supplement and April 2015 supplement to Characteristics and Risks of Standardized Options. Besides being accessible via our Web site, copies of the Options Disclosure Document are available from your Vision sales representative, or by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606.