The Energy Volatility Program is a systematic Volatility hedged option program guided by a proprietary trading model developed to trade the CME/NYMEX Energy futures volatility and designed to anticipate when the market is in or about to enter a turbulent time. The Energy Volatility Program uses a proprietary options strategy, which includes options selling and options writing, to capitalize on the systematic entry signals produced by the program. Long option hedging is systematically designed to anticipate when the market is in or about to enter a turbulent time. While the hedging is intended to implement adequate risk measures, if an account does not meet the minimum account size requirement of $100,000 for this program, it is likely BGA will not be able to properly hedge or hedge at all in the account, thus exposing the account to large gains and losses compared to other accounts that were able to be hedged.
The Energy Volatility Program has been refined to achieve the desired returns while limiting account drawdowns. Products traded in the Energy Volatility Program are crude futures and options and natural gas futures and options. BGA may not trade these two energy contracts at the same time and it may be possible that only one may be traded for a duration of time.
The Energy Volatility Program focuses on short duration energy derivatives - the option expires within 30 days, because the time decay is the greatest in those final days. It does this primarily by identifying the option strikes with best risk/reward ratio.