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Wilshire Phoenix Responds to SEC Order Issued in Connection with the United States Bitcoin and Treasury Investment Trust

NEW YORK, NY – February 26, 2020 – The Securities and Exchange Commission (“SEC”) issued an order disapproving a proposed amendment to NYSE Arca Rule 8.201-E to list and trade shares of the United States Bitcoin and Treasury Investment Trust. In response, Wilshire Phoenix issued the following statement.
We at Wilshire Phoenix are very …

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Navigating the Risks of Trading Equity Options (Part 1)

Authored by William Herrmann

Vega, Rho, Theta, and Delta are terms often used to name fraternities and sororities and likely more familiar to many in that context as opposed to being central in the pricing and trading of derivatives.

If you are currently making use of options and are not familiar with the above important terms, we believe you should not be utilizing options. In our view, which is shared by many, one must be an expert on trading the underlying (in this case equities) prior to even considering trading equity options (options on equities are a derivatives).

Unfortunately, this is not the case, as depicted by the below charts.

Doubling Down on Derivatives Average Daily Options Volumes

In addition, we trust that most current or prospective options traders are not aware of the following:

“90% of retail option traders that trade on margin lose 90% of their funds in 90 Days.” (1)

However, discount brokerages (more often referred to as online trading platforms) portray a different narrative to prospective and existing clients.

For instance, E*TRADE (2), one of the more popular discount brokers, recently ‘tweeted’ the following:

“If you can figure out how to tackle your kid’s dorm room furniture, you can easily tackle options with E*TRADE. ”(3)

We believe the above is a dangerous statement that is in direct contrast with protecting investors.

Per the Wall Street Journal:

While brokerages can’t recommend certain types of products for self-directed clients, they are allowed to make that kind of investing possible, said Benjamin Edwards, a law professor at the University of Nevada, Las Vegas, who runs a free investor clinic.

“It’s sort of like, you come to Vegas and no one is recommending you drink and gamble, but it’s available,” Mr. Edwards said. He said he has seen more cases lately of investors losing considerable sums on options bets.

Mr. Edwards, the law professor, likens the rising participation in options to the run-up to the tech-bubble bust, when online trading became ubiquitous and brought Wall Street to Main Street. Then, many first-time investors flocked to E*TRADE and other electronic brokers, chasing internet and biotechnology stocks higher until those companies went bust.

“This feels familiar,” he said.

The Use of a Put Option to Protect Value

Your author concedes that using put option as a hedge against shares that one already owns may be a prudent strategy to protect against the decline of an underling equity for retail investors.

Let’s say an investor purchased 100 shares of ABC Company (ABC) stock for $10 per share. The price of the stock increased to $20 giving the investor $10 per share in unrealized gains—unrealized because it has not been sold yet. The investor probably does not want to sell their ABC holdings, because the stock might appreciate further. They also do not want to lose their $10 in unrealized gains. The investor can purchase a put option against the stock to protect a portion of the gains for as long as the option contract is in force.

In practice, the investor would buy a put option with a strike price of $15 for 75 cents (equity options are quoted differently than the price paid for the option, or premium, as noted below), which creates a worst-case scenario (in theory) of selling the stock for $15 per share. If all things remain equal and the put option expires in three months and the stock falls back to $10 or below before option expiration, the investor is protected against any losses below $15. In short, anywhere below $15, the investor is hedged until the option expires (in this case only 3 months). The option premium cost is $75 ($0.75 x 100 shares). As a result, the investor has locked in a minimum profit equal to $425 ($15 strike price – $10 purchase price =$5 – $0.75 premium = $4.25 x 100 shares = $425).

To execute this closing trade, the investor would “exercise” his put option by telling his broker that he wants to sell stock at the $15 strike price. The premium paid for the put is not recovered, but the stock is sold at $15, well above the market price of $10.

To summarize the exercise of the put option, if the stock declined back to the $10 price point, unwinding the position would yield a profit of $4.25 per share, because the investor earned $5 in profit—the $15 strike less $10 initial purchase price—minus the 0.75 cents premium.

If the investor didn’t buy the put option, and the stock fell back to $10, there would be no profit. On the other hand, if the investor bought the put and the stock rose to $30 per share, there would be a $20 gain on the trade. The $20 per share gain would pay the investor $2,000 in profits ($30 – $10 initial purchase x 100 shares = $2000). The investor must then deduct the $75 premium paid for the option and would walk away with a net profit of $1925.

Of course, the investor would also need to consider the commission they paid for the initial order and any charges incurred when they sell their shares. For the cost of the premium, the investor has protected some of the profit from the trade until the option’s expiry while still being able to participate in further price increases.

Investors should always defer to the advice of their registered financial advisor before employing the above strategy, any other investment strategy, or prior to investing into any asset, notwithstanding the use of options as strategy or not.

References:

1. Institute for Trading, May 15, 2017, https://www.youtube.com/watch?v=L7G0OfJUON8 @30:15

2. Telford, Taylor, and Renae Merle. “Morgan Stanley Buys E-Trade In $13 Billion Shakeup to Brokerage Market”. Washington Post, Feb 20th, 2020, https://www.washingtonpost.com/business/2020/02/20/morgann-stanley-etrade/.

3. Banerji, Lisa. “The Day Traders Are Back, Now Playing with Options”. WSJ, May 11th 2019, https://www.wsj.com/articles/the-day-traders-are-back-now-playing-with-options-11557572401

THE INFORMATION CONTAINED HEREIN REPRESENTS THE AUTHOR’S SUBJECTIVE BELIEF AND IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING THE INVESTMENT STRATEGIES MENTIONED HEREIN AND THEIR PROSPECTS BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. NEITHER THE AUTHOR NOR ANY OF HIS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN.

THIS ARTICLE INCLUDES INFORMATION BASED ON DATA FOUND IN INDEPENDENT INDUSTRY PUBLICATIONS. ALTHOUGH WE BELIEVE THAT THE DATA ARE RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS ARTICLE. MANY OF THE STATEMENTS IN THIS ARTICLE REFLECT OUR SUBJECTIVE BELIEF.



Source: Wilshire Phoenix
Author: Peter123

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United States Bitcoin and Treasury Investment Trust Files Amendment No. 6 to its S-1 Registration Statement with the SEC

NEW YORK, NY – February 14, 2020 – Wilshire Phoenix Funds, LLC, the sponsor of the United States Bitcoin and Treasury Investment Trust (the “Trust”) announced today that the Trust has filed Amendment No. 6 to its registration statement on its Form S-1 with the Securities and Exchange Commission (“SEC”) relating to the planned initial public offering of its common shares (the “Shares”). The Trust is an exchange-traded product (ETP) that will issue Shares that will trade on NYSE Arca once approved by the SEC. The initial registration statement was filed with the SEC on January 11, 2019 and Amendment No. 6 was filed on February 14, 2020.

The purpose of the Trust is to provide investors with exposure to Bitcoin in a regulated and transparent manner that is consistent with investor protection, while also mitigating some of the risk by reducing the volatility typically associated with the purchase of Bitcoin.

The Trust’s constituents will be (a) Bitcoin, a digital asset based on the cryptographic protocols used by the decentralized, peer-to-peer bitcoin computer network (“Bitcoin”) and (b) short-term duration United States Treasury Bills (“T-Bills”) in proportions that seek to closely replicate the Bitcoin Treasury Index (“BTI”). This makes the Shares less susceptible to the impact of sudden movements in the price of Bitcoin.

The BTI rebalances its allocation of Bitcoin and T-Bills on a monthly basis utilizing a mathematically derived passive rules-based methodology that is based on the daily volatility of the Chicago Mercantile Exchange’s Bitcoin Reference Rate. The Trust rebalances its assets on a monthly basis in order to closely replicate the BTI.

The Trust will also hold U.S. dollars for short periods of time in connection with (i) the purchase, sale and/or maturity of T-Bills, (ii) the purchase and sale of Bitcoin, and (iii) the payment of redemptions, if any, and fees and expenses of the Trust.

The number of common shares to be offered and the price range for the proposed offering have not yet been determined. Electronic versions of the Trust’s filings with the SEC, including Amendment No. 6 to its registration statement on its Form S-1, can be found at the SEC’s EDGAR system.
at https://www.sec.gov/cgi-bin/browse-edgar?company=united+states+bitcoin&owner=exclude&action=getcompany.

The offering of shares of the Trust will be made only by means of a prospectus. A copy of the preliminary prospectus, when available, may be obtained by mail from Wilshire Phoenix Funds, LLC, 2 Park Avenue, 20th Floor, New York, New York 10016, or by emailing funds@wilshirephoenix.com.

The registration statement relating to these securities has been filed with the SEC but has not yet been declared effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Wilshire Phoenix

Wilshire Phoenix is a New York based investment management firm dedicated to helping its clients manage assets throughout the investment lifecycle. The fundamental premise upon which the firm is built is to fulfill the needs of its clients in a rapidly evolving market. Whether providing financial solutions for institutions, private clients or individual investors, Wilshire Phoenix delivers informed investment management services for both traditional and alternative assets. To learn more contact info@wilshirephoenix.com.

Forward Looking Statement

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy. Words such as “will,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Media Contact:
Mitch Ackles
HFPR, 646.657.9230
media@wilshirephoenix.com


Source: Wilshire Phoenix
Author: Peter123

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United States Gold and Treasury Investment Trust Files S-1 Registration Statement With SEC

NEW YORK, NY – January 14, 2020 – Wilshire Phoenix Funds, an investment management firm dedicated to helping its clients manage assets throughout the investment lifecycle and sponsor of the United States Gold and Treasury Investment Trust (the “Trust”) announced today that the Trust has filed a registration statement on Form S-1 with the Securities and Exchange Commission relating to the proposed initial public offering of its common shares. The Trust is an exchange traded-fund (“ETF”) that will issue Shares which will trade on NYSE Arca, Inc. The purpose of the Trust is to seek to provide investors with adaptive exposure to gold in a manner that is efficient, convenient, and responsive to changes in market volatility conditions.

The Trust will have no assets other than physical gold bullion (“Physical Gold”), gold futures (“Gold Futures”) and U.S. Treasury Bills (“T-Bills”). The Trust will also hold U.S. dollars for short periods of time in connection with the purchase, sale and/or maturity of T-Bills, the purchase and sale of Physical Gold and Gold Futures, creations and redemptions, and to pay fees and expenses of the Trust.

The number of common shares to be offered and the price range for the proposed offering have not yet been determined. In connection with the offering, the Trust intends to apply to list its common stock on NYSE Arca, Inc. An electronic version of the registration statement can be accessed through the SEC’s website at sec.gov/edgar.

The offering of shares of the Trust will be made only by means of a prospectus. A copy of the preliminary prospectus, when available, may be obtained by mail from Wilshire Phoenix Funds, LLC, 2 Park Avenue, 20th Floor, New York, New York 10016, or by emailing funds@wilshirephoenix.com.

The registration statement relating to these securities has been filed with the SEC but has not yet been declared effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Wilshire Phoenix

Wilshire Phoenix is a New York based investment management firm dedicated to helping its clients manage assets throughout the investment lifecycle. The fundamental premise upon which the firm is built is to fulfill the needs of its clients in a rapidly evolving market. Whether providing financial solutions for institutions, private clients or individual investors, Wilshire Phoenix delivers informed investment management services for both traditional and alternative assets. To learn more contact info@wilshirephoenix.com.

Forward Looking Statement

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy. Words such as “will,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Media Contact:
Mitch Ackles
HFPR, 646.657.9230
media@wilshirephoenix.com


Source: Wilshire Phoenix
Author: Peter123

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Robo–Advisor Trends

Authored by: Garrette D. Furo, Partner of Wilshire Phoenix

Many individuals remain uncertain about how to manage their wealth when facing Wall Street. One study looking at client engagement with Wall Street by Makovsky found that a majority of individuals want to switch financial institutions. The reasons? The availability of lower fees and advanced mobile technology. (1)

Since the publication of the Makovsky survey, robo-advisor assets under management (AUM) has grown considerably. For those unaware, robo-advisors are an emerging sector in wealth management that package Individual Retirement Accounts (IRAs), cash management and even some financial planning within a simple application, often on mobile devices. Many of these services offer relatively sophisticated plays like tax-loss harvesting, and considering the infancy of the industry, LP commitments or smart beta strategies do not seem like stretches for application access at all.

By Q4 of 2019, the top five robo-advisors had a combined AUM of 187.5BB with Schwab (37BB) charging a 0% management fee by exclusively marketing their own funds. Other services like Betterment have tiered services: 0.25% of AUM for accounts valued up to $100k or 0.4% for assets over $100k for a premium plan that provides access to Certified Financial Planners. Consulting firm PricewaterhouseCoopers speculates that the market can increase by over 800BB in the next five years. (2)

Robo-advisors offer discounted access to wealth management often by using mean-variance portfolio optimization on Exchange Traded Funds (ETF), other large funds or individual share ownership. Many clients of the services are millennials who have been raised alongside automated services and prefer an offer from a fresh face rather than a traditional financial institution. Additionally, many of these services have low account minimums – some as low as one dollar – making them wildly accessible although small accounts may not include some high-touch features.

Methods of depositing cash into robo-advisory services are usually straightforward. One noteworthy method is the popular round-up which rounds up a users bank transactions to the nearest dollar and deposits the difference into an investment account. Indeed, this is an intelligent way to begin to grow wealth. The round-up deposit from a $3.51 cup of coffee can end up paying you back in full by the time you retire (assuming 40 years at 5% compounding). The robo model may pose risk to traditional wealth managers and likely increase the bottom line for custodians and fund issuers and administrators overall.

Niche investing within the robo-advisor space is becoming an increasingly popular trend with services rendering portfolios that are themed towards specific sectors, such as tech-takeout targets, defense and those focusing on dividend yield. Multiple robo-advisors are rounding up user transactions to the nearest dollar and depositing the difference into Bitcoin and other digital assets, another prevalent investment opportunity for young people.

The most significant opportunity within the robo-advisor space may be the integration of Socially Responsible Investing (SRI) and providing the architecture that allows users assign individual preferences to their portfolios. Bank of America has reported that SRI is a priority for at least half of millennials regardless of net worth. (3) Echoing Bank of America, Morgan Stanley reported that millennials are twice as likely to invest in companies or funds that target a specific social or environmental outcomes. (4) As these services grow – more dynamic investment and corporate governance opportunities are arising that can streamline and eventually introduce an individual’s engagement in corporate America.

About the Author

Garrette David Victory Furo, CAIA is a Partner of Wilshire Phoenix. Garrette is an early adopter of digital assets and decentralization who specializes in financial products and financial technology related to blockchain technology. Garrette has supported the public, and private sector on related matters and his clients have included mature ventures, bulge-bracket banks, and family offices. Previous to his tenure in the digital asset space, Garrette was a neurobiology researcher at Columbia University Medical School where he investigated autism and neurodevelopment related to the GI system. Garrette holds a molecular biology and alternative investments dual degree from Hampshire College and is recognized as a Chartered Alternative Investment Analyst (CAIA).

Sources:

1. 2016 Wall Street Reputation Survey, Makovsky.

2. Asset Management 2020: A Brave New World, PwC.

3. 2013 U.S. Trust Insights On Wealth and Worth, U.S. Trust.

4. Sustainability Through the Eye of the Investor, Morgan Stanley.

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THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. ANY EXAMPLES OF DISCRETE INVESTMENTS PRESENTED HEREIN SHOULD NOT BE CONSIDERED A RECOMMENDATION TO PURCHASE OR SELL ANY PARTICULAR SECURITY. THERE CAN BE NO ASSURANCE THAT ANY SECURITIES DISCUSSED HEREIN HAVE BEEN OR WILL BE HELD BY ANY CLIENT (“CLIENT”) OF WILSHIRE PHOENIX CAPITAL MANAGEMENT, LLC, OR IF SO HELD, THAT THEY WILL REMAIN IN THE PORTFOLIO OF ANY CLIENT, OR IF SOLD WILL NOT BE REPURCHASED. THE SECURITIES DISCUSSED ON THIS WEBSITE DO NOT REPRESENT THE ENTIRE PORTFOLIO OF ANY CLIENT AND IN THE AGGREGATE, MAY REPRESENT ONLY A SMALL PERCENTAGE OF ANY CLIENT’S PORTFOLIO HOLDINGS. IT SHOULD NOT BE ASSUMED THAT ANY OF THE SECURITIES DISCUSSED HEREIN HAVE BEEN OR WILL BE PROFITABLE, OR THAT EXAMPLES PRESENTED IN THE FUTURE WILL BE PROFITABLE OR WILL EQUAL THE INVESTMENT PERFORMANCE OF THE SECURITIES DISCUSSED HEREIN. NOTHING PRESENTED HEREIN SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY AN INTEREST IN A CLIENT WHICH MAY ONLY BE MADE AT THE TIME A QUALIFIED OFFEREE RECEIVES A CONFIDENTIAL PRIVATE OFFERING MEMORANDUM, WHICH CONTAINS IMPORTANT INFORMATION (INCLUDING INVESTMENT OBJECTIVE, POLICIES, RISK FACTORS, FEES, TAX IMPLICATIONS AND RELEVANT QUALIFICATIONS), AND ONLY IN THOSE JURISDICTIONS WHERE PERMITTED BY LAW. NEITHER WILSHIRE PHOENIX CAPITAL MANAGEMENT, LLC, NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN.



Source: Wilshire Phoenix
Author:

Peter123