Asset Management Services

At Ortho-1 Capital, we manage your funds with an emphasis on effective fund utilization and the research and development of investment management methods, primarily using Nikkei 225 options, foreign exchange margin trading, and Japanese government bonds (JGBs).

We outsource fund management to a partner with a stable investment track record over many years, and always share the latest investment information. Since we began investing with this partner, our investment performance has yielded an impressive return that has averaged above 40% annually.

Please feel free to contact us for more information regarding our investment methods.

Investment Stance

In principle, our investment stance is delta neutral (we do not bet on the direction of the market). Accordingly, there is no relationship with the direction of the market.

Our basic approach is to closely follow volatility curves, and sell relatively high volatility and buy relatively low volatility. Because the size of our positions selling volatility is larger than our buying positions, however, our overall position is volatility short. When a market moves and delta shifts, we close our position and build a new position that is closer to delta neutral.

Major Risks

Because our overall position is vega short (shorting volatility) and gamma short (market fluctuations will cause delta to move against us), sharp increases in volatility and markets with drastic fluctuations present risks.

We do hedge against market fluctuation, so some small movement does not present a particular problem, but our position is vulnerable to markets with drastic fluctuations or volatile markets with repeated cycles of sharp upward followed by sharp downward movements.

Specific Investment Example

Out of the money put potions (options to sell at prices significantly below current market prices) for both the Nikkei 225 and JGBs have high volatility, so we buy relatively cheap put options with strike prices somewhat below the current market price and sell slightly more, relatively higher priced, put options with even lower strike prices .

Example Using Nikkei 225

18,500 Put Buy 1 : 18,000 Put Sell 2
We initially take this position, and following the market’s movements, add to or change the position.
If there is a sudden drop in the market, we buy back the 18,000 put options and sell options with a lower strike price.

Examples of Investment Methods

■Nikkei 225 Options

■General Strategy for Nikkei 225 Options

We use the following eight basic trading methods for options trading, using multiple option positions with differing strike prices and exercise dates to balance various risks and returns using a variety of strategies.