Risk Disclosure

1. General Futures Trading Risks

Futures contracts are leveraged instruments. A relatively small market movement can result in a proportionally larger impact on the funds you have deposited as margin. This leverage can work both for and against you. You may sustain a total loss of initial margin funds and any additional funds deposited with your broker to maintain your position.

Specific risks of futures trading include but are not limited to:

• Leverage risk: ES (E-Mini S&P 500) futures contracts control $50 × the S&P 500 index value. At an index level of 5,000, one ES contract controls $250,000 in notional value. A 1% adverse move results in a $2,500 loss per contract.
• Margin calls: If your account falls below minimum margin requirements, your broker may liquidate positions at a loss without prior notice.
• Market gap risk: Futures markets can open at prices significantly different from prior closes. Adverse gap openings can result in losses exceeding margin deposits.
• Liquidity risk: In fast-moving or illiquid market conditions, it may not be possible to exit positions at desired prices.
• Counterparty risk: While CME-cleared futures carry minimal counterparty risk, broker insolvency could affect your account.

2. Options on Futures Risks

The PutYield strategy involves selling (writing) put options on ES futures contracts. Selling options carries unique risks distinct from buying options:

• Unlimited theoretical loss: While selling a put option limits losses to the downside (since the underlying cannot go below zero), a catastrophic market decline could result in very large losses.
• Premium received is your maximum profit: When you sell a put, the premium received is the most you can ever make on that specific trade. Your potential loss, however, is substantially larger.
• Assignment obligation: As a put seller, you are obligated to purchase the underlying futures contract at the strike price if the option is exercised. See Section 3 below.
• Volatility risk (Vega): Rising implied volatility increases the value of options you have sold, creating unrealized losses even if the underlying hasn't moved to your strike.
• Time is generally in your favor as an option seller, but rapid adverse moves can outpace theta decay.

3. Assignment Risk — The PutYield Strategy

The PutYield strategy does not use stop losses. All trades are held to expiration. This creates a specific and important risk scenario that all subscribers must understand before following any alerts:

If the ES futures price closes below the sold put strike at Friday expiration, you will be assigned a long ES futures position at the strike price. This means:

• You are now long one ES futures contract (controlling approximately $250,000–$300,000 in notional value at typical index levels)
• You must have sufficient margin in your account to hold this position
• PutYield's strategy is to hold this long futures position until the market recovers to at least the strike price
• Historical data cited by PutYield suggests a maximum assignment drawdown of 2–3.73% and average recovery of approximately 7 days. These are historical figures and do not guarantee future outcomes.
• In a severe or prolonged market decline, recovery could take significantly longer or may not occur at the levels described
• During the hold period, you must maintain margin requirements or face forced liquidation by your broker at a potentially significant loss

4. Past Performance

PutYield represents a 99% historical option expiry rate across 482 trades since 2020. You must understand the following about this figure:

• Past performance is not indicative of future results — this is not a legal formality, it is a factual statement
• The period from 2020–2025 includes periods of extraordinary monetary policy, market support, and specific volatility conditions that may not repeat
• A strategy with a 99% win rate and no stop losses has large tail risk — the 1% of losing trades can result in losses that dwarf many weeks of collected premium
• Any performance figures shown are illustrative and based on one contract. Individual results will vary based on execution price, broker, timing, and market conditions
• Performance figures do not account for taxes, commissions, or margin costs

5. Regulatory Status

PutYield is not registered with any financial regulatory authority. Specifically:

• PutYield is not registered as an Investment Adviser with the SEC under the Investment Advisers Act of 1940
• PutYield is not registered as a Commodity Trading Adviser (CTA) with the CFTC or NFA
• PutYield relies on the "publisher exemption" which permits the provision of impersonal, non-tailored financial information to the general public without registration, provided the information is not personalized to individual subscribers
• Subscribers are solely responsible for determining whether the PutYield service constitutes investment advice under applicable laws in their jurisdiction

We strongly recommend consulting with a licensed securities attorney familiar with your jurisdiction's laws before subscribing.

6. Not Suitable For All Investors

The PutYield strategy may not be suitable for you if:

• You have limited capital and cannot sustain the margin requirements for assignment scenarios
• You require guaranteed or predictable income from your investments
• You are not familiar with futures or options trading mechanics
• You cannot tolerate the emotional stress of holding an assigned position through a market drawdown
• Your financial situation requires the capital you would use for this strategy
• You are investing money you cannot afford to lose

7. Independent Decision Making

Every trade alert published by PutYield describes what the operator personally does in their own account. It is a description of their own trading activity provided for educational purposes. It is not a recommendation that you should do the same. Your personal financial situation, tax circumstances, risk tolerance, account size, and investment objectives may differ significantly.

You are solely and exclusively responsible for all trading decisions you make. PutYield, its operators, employees, and affiliates accept no responsibility or liability for any losses you incur as a result of following, partially following, or misunderstanding any trade alert or other content.

8. Seek Professional Advice

Before trading futures or options, you should:

• Consult with a licensed financial adviser who understands your complete financial picture
• Consult with a tax professional about the tax treatment of futures gains and losses in your jurisdiction (futures in the US receive 60/40 tax treatment under Section 1256)
• Read and understand your broker's own risk disclosures
• Paper trade or use a simulation account until you are comfortable with the mechanics
• Never trade with money you cannot afford to lose entirely

9. Contact

For questions about this Risk Disclosure, contact us at support@putyield.com.