Our derivative trading is in no way based upon speculation!
The purpose of the company is to generate income by writing financial contracts. Preferably equity options, index options and volatility contracts, but without restrictions to include other types of derivatives, stock holdings related to options positions and other types of financial instruments if desirable. We mainly write contracts and our trading is in no way based upon speculation. Handling and limiting risk is essential and our main focus.
Nobo Capital was initiated by Norse Combinator, which held experience and expertise in the field, and had for a longer period of time been considering expanding this part of the business. Together with related business partners, Nobo AS was thus founded on July 29th, 2019.
Explaining our business
Within our strategy of writing financial contracts, we write put options that obligates us to buy shares of a chosen stock at our strike price, if the stock falls below that price by the expiration date of the contract. We get paid for setting up this obligation, because we are basically selling an insurance policy, so we get the premium. This policy says that if the stock declines below the option’s strike price by expiration, we will buy the stock at the strike price, no matter how far the stock has fallen. This insures another investor, who pays us for this insurance.
Doing this without really knowing what you are doing is hazardous and involves large amount of risk. Thorough and deep knowledge of how derivative markets work and how quick and large movements in the underlying asset reflects the derivatives price is crucial. Combining this with great knowledge of the underlying companies and maintaining a sufficient amount of excess liquidity and buying power to stand out downturns is in the basis of our strategy. Knowing the calculated probabilities for success on each contract or contract combo is further important. What we are looking for is moreover improbabilities. If we also have the ability to write the contract when implied volatility is higher than historical volatility for a great company without major issues, our collected premiums will be greater, but handling and limiting risk always comes first.