TOS Advisors

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At TOS Advisors we employ a variety of strategies with the objective to give you - the investor - the best possible portfolio to fit your investment needs. We use strategies that can be defined as traditional, alternative, and return enhancement.

By combining these methods we can offer innovative investment opportunities that other managers may be unable to provide. When you choose TOS Advisors to manage your investments, we will work with you to find the combination of strategies that is best for you and that will optimize your return while minimizing risk.

Types of Strategies

Managed Options Portfolio
Index Portfolios
Return Enhancement Strategies
Single Stock Concentrated Position Strategies
Municipal and Government Bond Portfolio Laddering
Wealth Builder Portfolios
Liquidity Management Accounts
Dynamic, Hedged, Globally Diversified Allocation Strategies

Alternative Asset Classes		Traditional Asset Classes

* Absolute return strategies seek total return as their investment objective instead of the comparative returns to benchmarks that are the objective of traditional return strategies.

Strategy 1: Managed Options Portfolio

With cash as the underlying asset, TOS Advisors will leverage our extensive options trading experience to manage a portfolio that seeks total return. Combining the inherent benefits of short volatility positions with our defined risk strategies, we will seek to deliver positive returns that are not dependent on an upward move in the stock market.

This strategy establishes non-market directional trades in the major equity indexes in order to extract volatility premium. This portfolio's two main objectives are total return and capital preservation. With a combination of extensive experience in options trading and our state of the art trading platform, we are able to create a pricing edge that substantially improves the probability of initiating successful trades.

Example Strategy - Calendar Spread
OEX vs 6% range 30 day expirations (10 year)

By selecting a (see chart) 6% zone up or down from each starting point, we are able to use probabilities of expected returns with our pricing edge to create a low or non-correlated source of potential investment returns.

Strategy 2: Index Portfolios

Think active fund managers can pick them any better? Think again. Studies have shown that, over time, indexing has outperformed two-thirds of the active equity managers on an after-tax basis. That means, to outperform an indexing strategy, you'd have to pick a manager who consistently performs in the top one-third of all active managers.

What is the biggest reason for the performance discrepancy between indexing and managed accounts? Costs. Actively managed accounts incur expenses that passively managed accounts do not, including additional transaction costs, tax-inefficiency and often higher management fees.

At TOS Advisors, depending on account size, we buy for your account the actual shares of the companies in an underlying index. Rebalancing is performed on a regular basis to insure minimal performance drift from the index. Having an indexed portfolio also enables us to more easily enhance the returns with various harvesting strategies and options.

This strategy provides the investor with a diversified large cap portfolio that performs within a high degree of correlation with the chosen index. For investors who desire a long term equity position that has low turnover, is tax efficient, and has relatively low expenses this may be what you are looking for.

Once established this portfolio is ideal for further income enhancement such as those detailed in our section on Return Enhancement Strategies.

Strategy 3: Return Enhancement Strategies

HARVESTING WORKS
Loss harvesting means selling securities to realize a loss for tax purposes. TOS Advisors may apply this strategy when you have realized investment gains, thus offsetting some or all of your gains and avoiding out-of-pocket tax-liability expenses. Conversely, we harvest gains when your portfolio has realized losses. This allows you to reap the full tax benefit of any previously incurred loss.

TAXES ARE INEVITABLE (AND CONTROLLABLE)
Think about these numbers: The SEC estimates that, each year, the average stock fund loses 2.5% of its total return to taxes. Specifically, losses ranged from zero in the case of very efficiently managed funds to as high as 5.6% for the least efficient funds. Over time, the numbers are even more staggering. Over a recent five-year period, investors in diversified public funds were reported to have lost an average of 15% of their annual gains to taxes. By contrast, the TOS platform helps you control certain taxable events and protect more of the return you've earned.

MAKING EROSION WORK FOR YOU
Our most straightforward strategy collects option premium by selling limited risk vertical spreads. Using probability models to estimate ranges of index performance, TOS Advisors finds trading opportunities that have, based on our research, a 75% probability of enhancing your portfolio's yield by approximately 20 basis points per month, or 2.5% per year. This lets you maintain unlimited upside performance while receiving the benefits of premium erosion. Our research has shown that diversified indexes typically fluctuate less than 6% in either direction from one option expiration to the next. With that in mind, we regularly sell vertical spreads outside that 6% range. When successful, this credit becomes a yield enhancement.

Any of these strategies can be easily used with our index portfolios.

Strategy 4: Single Stock Concentrated Position Strategies

Investors with large holdings in a single company need strategies to reduce risk and volatility as well as strategies for diversification and liquidity. With our team of options experts we use a variety of hedging techniques to accomplish these tasks entirely customized for your personal holdings.

Having 20% or more of your investable assets in one holding can be dangerous. Whether it’s employee stock options, corporate stock or just outright ownership— managing that position can be challenging. Tax, legal and timing strategies should be left to the pros. We do this for a living—you don’t.

Strategy 5: Municipal and Government Bond Portfolio Laddering

Playing it safe means lowest risk possible. For those investors needing allocations of fixed income, we build laddered portfolios of non-corporate individual bonds. Depending on an individuals tax consequences the two primary portfolios consist of either government bonds, or for those needing completely tax free income, municipal bonds.

With 20 plus years of fixed income experience and access to a state of the art dealer inventory trading platform, we are able to access multiple dealer inventories to find the largest section and best pricing for our clients.

Please call our office for a personalized portfolio recommendation.

Strategy 6: Wealth Builder Portfolios

If you are a small or large investor looking for diversification ,we have a managed mutual fund program that we can recommend to help you with your personal investment objectives. From Aggressive Growth to monthly Income, we can help determine which of our managed portfolio’s may be right for you. Once the proper model is selected, we do the rest. All of our strategies seek to provide you, the investor with an asset allocation that fits your needs.

We scour the mutual fund universe in search of portfolio’s that meet our stringent criteria, for each of our four models. Aggressive Growth, Growth, Capital Income Building and Income. We then monitor each of the manager’s and their relative performance along with our proprietary criteria’s on a go forward basis. Quarterly reviews are performed for each of our clients and adjustments can be made as necessary. The models’ objectives never change, the managers do. We hate paying fees more than anyone, so call us to discuss our low fee structure.

Strategy 7: Liquidity Management Accounts

Have a ton of cash, but can’t tie it up? Try our liquidity management account for short term income and safety of principle.

We manage this account to give you the best yield (interest rate) possible while keeping maturities very short term. We offer 7 day, 28 day and 35 day municipal notes that "float" auction to auction. Each auction the rate resets. Take it out or let it roll until you need it.

The interest is tax-free too. Taxable notes are available as well. Minimum investment is $500,000. Call us to discuss the current rates!

Strategy 8: Dynamic, Hedged, Globally Diversified Allocation Strategies

Seek to outperform the indexes? Do you seek global diversification with less risk and higher returns? We have partnered with LayLine Capital to provide you a choice of three dynamic, hedged, globally diversified allocation strategies. Each month the portfolio dynamically allocates assets around the world using a proprietary combination of equity-based indexes and exchange traded funds. These core assets are then combined with equity options strategies to generate additional return (greater "alpha").

The three strategies we offer you include (1) Dynamic I (D1)- a Conservative strategy that targets 5-10% ROR using a combination of fixed income and neutral strategy options; (2) Dynamic II (D2)- a Growth strategy that targets 10-15% ROR using a blend of equities and fixed income and neutral strategy options; and (3) Dynamic III (D3)- an Aggressive strategy that targets 15-20% ROR using a blend of equities and both directional and neutral strategy options.

All of our "Dynamic" class of strategies seek to provide you, the investor with the appropriate risk/ return investment portfolios that fit your needs. Please contact us to discuss this exciting range of strategies to diversify your total investment portfolio

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Disclosure: thinkorswim (TOS) Advisors is an SEC registered investment advisor. This information herein is for informational purposes only and is not to be construed as an offer to sell or a solicitation of an offer to buy any services or securities. This information has been prepared from original sources and data we believe to be reliable, but we make no representations as to its accuracy, completeness, or results. All sources and data constitute our judgment and are subject to change without notice.

thinkorswim Advisors, Inc., is an SEC registered investment advisor, and an affliate of TD AMERITRADE, Inc. Neither is responsible for the products or services of the other.