Position Papers.

Mechanically, high-yield bonds have the same features as other types of bonds. They have a scheduled maintenance payment, a principal repayment at a specified maturity date, and in some but not all cases, maintain priority over other obligations in the capital structure. While the maintenance payment (or coupon) is typically fixed, the value of the bond is determined by the market's assessment of the probability of repayment.

The Fed's plan to tighten monetary policy and tighter regulation discouraging broker-dealers from taking risk, has led to less liquidity in the U.S. stock market and exacerbated daily moves.

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Buying outright puts to hedge equity downside can be costly and a constant drain on portfolio returns.

• The Put-Spread Collar is the popular form of portfolio protection.
• Passaic's Hedged Equity strategy is a low-risk equity strategy that seeks to provide capital appreciation through equity market participation while limiting the downside.
• Passaic's approach to implementing a put-spread collar is driven by an informed understanding of option market dynamics which includes a proprietary view of implied volatility, term structure, and skew dynamics.

In this piece, we will briefly explain how various defensive options strategies and passive option indices work and why Passaic Partners' tactical dynamic approach produces better risk-adjusted returns with transparency and liquidity.

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