U.S.-based hedge fund manager Liberty Street Fund Management will consider buying and selling over-the-counter equity options as its recently launched hedge fund's assets grow. Tom Greene, founder in Athens, Ga., explained that the manager's recently launched Liberty Street High Income Partners fund entails the firm selling covered calls on medium volatility stocks that the firm purchases, with the calls yielding income for the fund. Purchasing puts will also be considered as a means of hedging the portfolio, he added.
Initially the firm will only sell listed calls but will consider entering over-the-counter contracts when its assets increase. Liberty Street has no specific targets on how much it wants to manage before entering OTC trades and Greene declined to state its assets under management.
Spear, Leads & Kellogg is the prime broker but it would likely shop between counterparties for any OTC trades, noted Greene. The fund manager works with Chicago-based consultancy the Rich Advisory Group for quantitative strategies and option execution.