How Spout Runs the Strategy

Spout runs the strategy the same way every cycle, by rules, not by forecasts.

Principles

Covered only

Calls are written only against real shares that back a pool's collateral, held in Spout's brokerage account, in whole lots of 100 shares. Spout never writes more calls than those shares cover, and never writes calls against tokens that users simply hold in their wallets.

One set of calls per asset, on the whole pool

Pooling lets a holder of 5 shares take part on the same terms as a holder of 5,000, and any assignment is shared in proportion across everyone in that asset.

Strikes out of the money

Strikes are set above the current price so that assignment is uncommon. Over many cycles, the aim is for the premium collected to exceed the occasional cost of assignment.

Calibrated per asset

Each asset has its own settings, reviewed as market conditions change.

Short cycles

Calls run weekly or every two weeks, depending on the asset. Short cycles mean the strategy resets often and responds to changing markets.

Discipline over cleverness

Spout does not chase a losing cycle by adding risk or trading for its own sake. When conditions are unusual, it can pause writing new calls on an asset.

Stop when unsure

If anything in a cycle does not reconcile, the cycle halts and waits for a person to review it rather than acting on bad data.

Diversification

The 11 supported assets span large cap technology, AI infrastructure, healthcare, financials, energy, gold and crypto linked assets. Each asset runs its own cycle, so a bad week in one does not stop the others.

Who buys the calls

Calls are standard listed options, sold on US options exchanges through Spout's brokerage account. Buyers pay the premium up front, and the options clearing house stands between Spout and every buyer, so no single buyer has to be trusted to pay.