Call Spread Defensive
Priority is given to preserving capital.
Objective
To reduce potential losses and stabilize performance ,
with a net income known in advance .
Principle
OIS Finance puts in place a protection structure to stabilize performance, in line with the client's risk profile.
When markets become uncertain,
OIS Finance is adapting the strategy in order to limit potential losses.
The cost of protection is known and controlled.
Scenario: 1
Market down:
protection limits losses.
Scenario: 2
Stable market: limited impact.
Scenario: 3
Bull market:
Protection is not activated.
Summary
Protection → Stability
Controlled risk → Serenity
📌 Concrete example – Defensive Call Spread (Protection)
Customer situation
Equity portfolio: CHF 100,000
Index/stock reference value: 100
The client fears a temporary market downturn
OIS Finance acts as discretionary manager
Structure set up by OIS Finance
Selling a call option at 100
Buying a call option at 110
Maturity: 3 months
👉 Objective: to frame performance and generate a protective cushion
Cost/revenue of the structure
Premium collected (call 100): +4,000 CHF
Premium paid (call 110): -1,500 CHF
➡️ Immediate net result: +2,500 CHF ➡️ Protective cushion: 2.5%
Scenarios at the end of the term
🔴 Market down (e.g., 90)
The options expire worthless
The client retains +2,500 CHF 👉 The portfolio decline is partially offset
🟠 Stable market (between 100 and 110)
The structure generates the expected revenue
Neutral to positive impact on performance
🟢 Market in sharp rise (>110)
The profit is capped.
The client forgoes part of the price increase 👉 In exchange for downside protection