Biltmore Equity Premium Overlay (EPO)

The Biltmore Premium Overlay strategy is a trading program available to qualified Biltmore clients that is designed to be used alongside your existing well-diversified Biltmore portfolio to potentially enhance total returns without adding to the portfolio’s long-term exposure to equity market and bond market risks.

The Challenge Addressed by the EPO Strategy

Investors seeking attractive returns without too much traditional risk face three problems in today‘s financial markets:

  • Long-term bond yields are historically low
  • Equity valuations are above historical norms
  • Short-term money market instruments are near zero and generally don’t keep pace with inflation.

The premise of the strategy is that if we can identify a persistent pattern in stock prices, then we can design a strategy that takes advantage of those patterns.  This strategy works by attempting to predict whether the stock market is going to go up or down on a daily basis.

EPO strategy design

Each morning a trade is placed in an attempt to benefit from the direction of the market that day. All positions are in large, liquid ETFs. Each daily position is closed at the end of the trading day. No positions are maintained overnight. The goal is to more often than not accurately predict when the market is going to go up or down, then position the portfolio to consistently generate capital gains.

When these intraday trades are overlaid on an existing, unlevered position, they can be executed without additional cash.  The objective is to increase long-term returns without requiring additional capital.

For more information about participating in the Biltmore Equity Overlay Program, please contact your Biltmore representative.

 

Disclaimer: The information above is created solely for informational purposes with the express understanding that it does not constitute an offer, solicitation or recommendation to invest in a particular investment; a means by which any such investment may be offered or sold; or advice or an expression of our view as to whether a particular investment is appropriate. As a condition to providing this information, no representation, warranty of undertaking, express or implied, is made by Biltmore Capital Advisors, or any of its respective affiliates, agents, associated companies  or any other person associated with either party, as to the reliability, accuracy or completeness of the information contained herein, or any other written or oral communication transmitted or made available to the recipient. Biltmore Capital Advisors and its respective affiliates and representatives expressly disclaim any and all liability based, in whole or in part, on such information, errors therein or omissions therefrom.

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