Why Covered Calls?
The goal of the OGF’s covered call strategy is is to enhance returns through systemic portfolio coverage.
The Oasis Growth Fund (OGF) employs a disciplined Covered Call (CC) strategy to target enhanced portfolio returns. At its core, the philosophy is simple: “Sell high, buy low.”
In practice, this means:
- The Fund sells Call options on shares already held in the portfolio.
- In exchange, OGF receives an upfront premium.
- If the share price rises above the Call’s strike price, the buyer may exercise the option—requiring OGF to sell shares at that price.
- When executed with discipline, this process can systematically generates additional revenue while retaining the majority of the Fund’s underlying growth exposure.
Revenue Expectations
A well-managed, out-of-the-money (OTM) Covered Call program has the potential to generate an additional 2–4% net revenue annually:
- This is over and above any dividends received from the growth-oriented portfolio.
- The additional yield compounds over time, providing meaningful value to investors.
- The strategy is implemented without undue risk, as no “naked” options are written.
How the Oasis Growth Fund Does It
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Disciplined Portfolio Coverage
- ~90% of the portfolio participates in the CC program.
- Some securities are excluded if they lack robust options markets.
- Geographic mix: ~70% U.S., ~30% Canadian equities.
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Time Diversification
- Calls are written monthly with staggered maturities of 3–6 weeks, smoothing results across market cycles.
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Out-of-the-Money (OTM) Strikes
- Strike prices are chosen above the current market price, allowing room for stock appreciation.
- Delta target: ≤ 0.10, implying a 90%+ probability of retaining the shares while keeping the premium.
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CBOE statistics support this as they report that approximately:
- 10% of options are exercised.
- 30–35% expire worthless.
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Systematic Harvesting
- Premiums are typically closed out when 80–90% of value is realized, locking in gains efficiently.
- Monthly repetition generates higher aggregate yield than longer-term contracts.
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Intelligent Flexibility
- If shares temporarily spike above strike prices, OGF usually allows options to mature, then re-establishes positions.
- This ensures continued exposure to long-term growth while systematically monetizing volatility.
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Risk Management
- No naked calls. Every contract sold is fully backed by the Fund’s existing holdings.
- Stop Loss Coverage. Places limits on the subversion of premiums by quickly advancing growth stocks.
The Investor’s Benefit
The OGF Covered Call strategy is designed to attempt to:
- Boost returns with incremental income.
- Preserve growth exposure while monetizing volatility.
- Reduce downside risk modestly through premium income.
- Enhance portfolio stability with a disciplined, repeatable process.
Disclosures
This investment memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. Fieldhouse Capital Management Inc. (herein “Fieldhouse”) has no duty or obligation to update the information contained herein. Further, Fieldhouse makes no representation, and it should not be assumed, that past investment performance is an indication of future results.
The return of the Oasis Growth Fund is based on monthly total returns of the Fieldhouse Pro Funds Trust – Series O Oasis Growth Fund in Canadian dollars since inception at January 1st, 2020. All returns are time-weighted total returns of the F class, net of fees, and annualized for periods one year or greater.
Fieldhouse Capital Management Inc. is the Investment Fund Manager, Portfolio Manager and trustee of Fieldhouse Pro Funds Trust Advisor Series funds. Fieldhouse Pro Funds Trust funds are subject to management fees, trailing commissions, incentive fees and administration fees. For detailed information on fees see the the Fieldhouse Pro Funds Trust offering memorandum and the Series O offering memorandum supplement or the term sheets.
The Series O Oasis Growth Fund of Fieldhouse Pro Funds Trust was previously Class O of Fieldhouse Pro Funds Inc. The fund changed it’s investment strategy and it’s name from the “Oasis Canadian Growth++ Income Fund” to “Oasis Growth Fund” on January 1st, 2020. The fund NAV was reset to $10 at that time. The funds strategy changed from a Canadian growth and balanced fund to the North American Growth fund described on this page and in the Fieldhouse Pro Funds Trust offering memorandum. Class O of Fieldhouse Pro Funds Trust was previously Class B of Fieldhouse Pro Funds Inc. which had an inception date of April 1 2016. Fieldhouse Pro Funds Inc. converted to Fieldhouse Pro Funds Trust on January 1st, 2022. Historical fund performance for previous strategies is available on request. The Fieldhouse Pro Funds Trust offering memorandum and the Series O offering memorandum supplement contain additional information that should be considered by all investors prior to investing.
This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. There are many important factors to consider when investing and you should seek professional advice that can assess your personal circumstances and risk appetite. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Fieldhouse believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.
This memorandum, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of Fieldhouse.
