Theta Capital Partners

Established in 2008, Theta Capital Partners is a San Francisco-based hedge fund manager. Equity market investors have a bias towards long investments and hedge the preferences through the purchase of options. This imbalance in supply and demand creates a persistent excess of implied volatility to historical volatility, which is manifested in statistically excessive options prices. Theta Fund takes advantage of this imbalance by selling short-term (typically weekly) out-of-the-money S&P 500 vertical spreads that are believed to have over a 90% probability of expiring worthless based on technical and fundamental analysis. The portfolio does not have any naked options positions and is sometimes hedged with futures and additional long options.