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Pure Alpha Strategy

Overview

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Pure Alpha focuses on stocks with highly liquid options and trades momentum-based moves for potentially asymmetric, risk-adjusted returns.


Positions primarily consist of options expiring in less than two weeks. The strategy also includes select earnings-based option trades when warranted, with each trade designed for convex, asymmetric outcomes.

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The strategy applies a whole-account framework in position sizing, risk management, and notional hedging — ensuring consistency across capital exposure and trade structure.

 

Features

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  • Signals delivered via auto trade available through Global Auto Trading

  • No set or subscription fees.  Fees variable based on value provided and invoiced to client

  • Opportunity to profit regardless of market direction 

  • Designed for clients to incrementally scale trade sizing with account growth
     

What it Trades

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  • Directional and momentum-based options on high-beta, highly liquid stocks with near-term expiration (front week or next week)

  • Trades typically have three to seven days until expiration

  • Intra-week hedging via daily-expiration index options or ITM/OTM stock hedges (delta-skew) against core directional positions

  • Earnings-based option setups on liquid, high-beta names

  • Macro, momentum, and news-driven option trades on both index (e.g., QQQ) and stock options with expirations from one day up to two weeks

How It Works

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  1.  Submit New Client Agreement Form here

  2.  Determine Risk Budget (see below)

  3.  Periodically review performance and make trade size/scaling adjustments as needed

  4.  When applicable pay any invoiced fees 
     

Trade Size & Allocations

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The strategy is designed for clients starting with up to $1,000 of risk per trade (1x scale), though some trades risk as little as $250 depending on signal strength, liquidity, and number of open positions.

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Clients should understand that some positions may expire worthless (-100%). No stop losses are used; the premium paid represents the defined risk. However, trades may be closed early if sentiment or signal conditions change.

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Conversely, core trades are initiated with the expectation of at least 100% potential return, with higher multiples possible depending on volatility expansion.

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Signals specify contract quantity at 1x scale for auto-trade execution. The strategy is designed for clients to mirror this sizing to maintain structural integrity of the trade and risk framework. Each client determines their own sizing preference, but proper execution begins at the baseline 1x scale.

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Auto-trading allows new clients to onboard at any time, begin at 1x scale, and scale up as their account grows — while maintaining proportional structure and hedge ratios.

Clients who wish to may also start at a higher scale than 1x if they choose to do so.  
 

Risk Budgets & Scaling

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While each client must define personal risk, the strategy was engineered for a $25,000 risk budget as the optimal baseline (1x scale).

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This is not individual financial advice — it reflects the model’s design assumptions for proper execution. A client allocating $25,000 typically experiences average weekly exposure between $2,500 and $5,000 per week, depending on signal activity and hedging.

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Maximum capital outlay can occasionally reach $7,000–$10,000 per week when supported by recent profits.

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Primary risk occurs during range-bound markets when both core and hedge premiums decay simultaneously. Weekly risk is defined by total long premium exposure.

Scaling is linear: each additional $25,000 in net profits allows a 1x increase in trade sizing while maintaining proportional risk relative to the new total risk budget.

Example:

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  • Start: $25,000 risk budget (1x), avg. position =< $1,000

  • +$25,000 net gain → scale to 2x ($50,000 risk budget, =<$2,000 avg. position)

  • +$50,000 net gain → scale to 3x ($75,000 risk budget, =<$3,000 avg. position)

  • and so on.....

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