In our view, many of the products marketed as “alternatives” today are, in economic substance, short optionality — they manufacture a smooth return by selling away the tail. Helion is built on the other side of that trade. We own the convexity, we pay for it honestly, and we have spent our research effort on the only question that then matters: how to survive owning it.
That idea is the whole firm. Everything else on this site — the strategy mechanics, the 1990–2025 backtest, the live results — is downstream of it. What follows is the reasoning, stated plainly enough to repeat in a client meeting and specifically enough to challenge in a due-diligence review.
There are only a few honest ways to change the shape of a return stream. You can add leverage. You can accept illiquidity. Or you can buy optionality. Most of the alternatives industry has quietly chosen a fourth: sell optionality, book the premium as yield, and call the resulting smoothness “low volatility.”
Covered-call and put-writing overlays, many income-oriented derivative funds, and the option-selling leg embedded in a good deal of structured product — the mechanics differ, the underlying trade does not. Each finances a comfortable present with a claim on an uncomfortable future. Some of these designs return part of that premium as a defined buffer against the first tranche of loss, which is a real benefit; none of them changes the direction of the trade. The return series looks superb precisely for as long as the tail does not arrive, which is also exactly how long the risk stays invisible in a correlation matrix.
Upside is capped in exchange for premium. Downside is cushioned by that premium — and by a defined buffer, where the structure provides one — but is otherwise largely retained. Reported volatility falls, reported Sharpe rises, and the distribution grows a left tail that the historical statistics have not yet had occasion to reveal.
It is a genuine strategy with genuine uses, and we hold no view on any particular product. Our point is narrower: in economic substance it is a short position on the same event the equity book is already exposed to, which limits how much diversification it can add.
We hold long-dated listed index options, so participation accelerates as markets rise rather than being sold away. The cost is explicit, recurring, and shows up in the return stream rather than hiding in the tail.
This is the harder side of the trade to hold. It is also the only side that produces a payoff genuinely different in shape from the portfolio it is meant to complement.
Characterizations of other strategies and product types on this page are Helion’s opinion, are general in nature, and are not statements about any specific product, sponsor or manager. See the disclosures below.
How a strategy responds as the market moves — the concave shape of sold convexity, the convex shape of owned convexity, and what a de-risk discipline changes about the left side.
Conceptual illustration of shape only. Not drawn to scale, not a projection, not derived from backtested data, and not a representation of any fund’s returns. Note that the gold line sits slightly below the blue one on the right: a discipline that de-risks into weakness gives up some upside, and it can be wrong. The left-hand shapes are drawn smoothly and without a scale — where the discipline engages is proprietary and is not marked here.
Read the solid blue line honestly: owned convexity is steeper in both directions. That is not a drafting error — it is the cost of the whole approach, and it is the subject of the next belief.
Convexity is not a hedge. It is leverage — and leverage cuts both ways.
A long convex sleeve is a magnificent instrument in a market that falls and recovers, and a wealth-destroying one in a market that simply grinds lower. We did not infer that. We tested it against the two secular bear markets that have actually happened, on the real option prices that traded through them — and left unmanaged, our own engine drew down more deeply than the index it is built on: roughly −78% in the dot-com bust and −65% through the Global Financial Crisis.
The two are not the same story, and the difference is the whole point. The GFC ended in a sharp V-shaped rebound, and unmanaged convexity round-tripped that drawdown and recovered — the convex thesis working exactly as designed. The dot-com bust was an L-shaped grind with no bounce to recover into, and there the same instrument compounded its losses. The danger is not the depth of the fall. It is a fall with no recovery to be convex into.
Most managers would leave that number out of a philosophy page. We lead with it, for a reason that is practical rather than noble: a risk you have named is a risk you can build against. An allocator who has not been told where a strategy breaks has not been given the information needed to size it. And a strategy whose failure mode is discovered by its investors, in real time, at the bottom, is a strategy that gets redeemed at exactly the wrong moment.
Figures are backtested / hypothetical, on real observed option prices, and are set out in full — with methodology and limits — on the Backtest page. Backtested performance is not indicative of future results.
Having named the failure mode, the design question follows directly: what actually protects a convex book through a grinding bear? Our answer is that judgment cannot, and should not be asked to.
The regime that hurts a convex sleeve most is not the crash. A crash is loud, fast, and easy to respond to. The dangerous regime is the slow one — months of drift lower with no single day alarming enough to force a decision. That is precisely the environment in which discretionary conviction performs worst, because every individual day makes a persuasive case for waiting.
So the exposure decision is removed from the moment. Helion runs a rules-based framework that cuts recommended exposure toward a defensive floor in a sustained decline, and treats returning to full exposure as a deliberate act rather than an automatic one, so the book is not re-exposed into a bear-market bounce that fails. Reducing exposure is the part everyone models; knowing when it is safe to put it back on is where the money is actually made or lost, and it is the part the framework spends most of its design on.
The framework evaluates the same inputs the same way every day. It does not require anyone to feel differently about the market than they did the week before.
Every exposure recommendation is recorded with the state that produced it. What the framework advised, and when, is reconstructable after the fact rather than remembered.
The framework produces exposure recommendations, reviewed and executed by the CIO. It never auto-trades, and it guarantees no protection.
De-risking is prompt; returning to exposure is deliberate. They are treated differently because they are different problems with different costs of being wrong.
What we publish is what the framework did — and, for qualified investors, how rigorously it was tested. What we do not publish, and do not hand over under any agreement, is how it works. That is not secrecy for its own sake: the results, the methodology, the limits and the evidence are all open to scrutiny. But the way the framework is built is the firm itself, and it is the one thing an NDA does not unlock.
We treat comprehensibility as a risk control, not a marketing preference. The most common way an investor loses money in a sound strategy is not that the strategy fails. It is that the investor exits it during the drawdown the strategy was always going to have.
That decision is rarely about the numbers. It is about whether the person holding the position — the advisor on the phone with a client, the analyst writing the quarterly memo, the committee member who inherited the allocation from a predecessor — can still articulate why it is there while it is down. If the answer depends on trusting a model no one in the room can describe, the position gets cut.
So we hold ourselves to a standard that is deliberately inconvenient: every part of what we do that can be explained, must be. The instruments are listed, liquid, exchange-traded index options — not bespoke, not bilateral, not marked by us. The economic logic is a sentence long. The failure mode is published. The proprietary boundary is drawn in one place, around the calibration, and stated openly rather than used as a general excuse for opacity.
The goal is not that you take our word for it. It is that you never have to.
A philosophy is defined at least as much by its refusals. These are standing constraints on the strategy, not current preferences.
We do not sell convexity for income. No covered-call overlays, no premium-harvesting sleeve, no structured-note wrapper. It would smooth the reported return and reintroduce the exact tail risk the allocation exists to diversify.
We do not buy asymmetry with borrowed money. Leverage and convexity are both ways to change the shape of a return. One of them costs a premium paid up front and known in advance; the other creates an obligation to a lender that comes due in the worst state of the world. We chose the first.
We do not seek returns from illiquidity. The options core is listed, exchange-traded and independently priceable. We would rather be marked by observable prices than smoothed by a valuation policy.
We do not run a black box. The proprietary boundary is one specific thing — the signal calibration. Everything outside it, including the results we do not like, is disclosed.
We do not pretend the discipline is free. De-risking into weakness means sometimes being under-exposed when markets snap back, and the supporting evidence rests on a small number of bear episodes. It is supportive. It is not conclusive.
We do not promise protection. The framework is advisory and rules-based; it improved risk-adjusted outcomes in testing and it can fail. We would rather lose an allocation than win one on an implication we cannot stand behind.
The questions we think an allocator should put to any convex strategy — including this one.
If a manager cannot answer specifically, they have not looked. Ours is a multi-year grinding decline, and it is documented.
Not a simulation of a hypothetical shock — the actual regimes, on the actual prices that traded through them.
Rules can be tested out-of-sample. Judgment cannot, and does not survive succession.
A defensible boundary is narrow and named. A vague one usually protects the manager from scrutiny rather than the strategy from imitation.
One belief governs how this allocation should be used, and it follows from everything above: a convex sleeve can only do its job if the investor is still holding it at the bottom.
A strategy that draws down materially and recovers convexly produces nothing at all for an investor who exits in the middle. So the right size is not the one that maximizes expected return — it is the largest one whose worst plausible year the total portfolio can absorb without the allocation being cut. We would rather be sized correctly and held than sized aggressively and redeemed, and we will say so in a meeting even when it argues for a smaller ticket.
The same belief is why we will not sell the convexity back for yield. Diversification that disappears in a crisis was never diversification; what makes a sleeve worth holding through a drawdown is a payoff that differs structurally from the core, not one that merely carries a different label.
How that belief is implemented — position sizing, the fixed-income complement, exposure caps, tax treatment and the rest of the mechanics — is set out on the Strategy page rather than repeated here.
Everything above is a claim. Each one has a page where it is either substantiated or shown to have limits.
The mechanics: the convex options core, the exposure framework that governs it, the fixed-income complement, and the risk and sizing discipline that surrounds both.
View the StrategyBoth secular bear markets replayed on real observed option prices, 1990–2025 — including the unmanaged drawdowns, the data validation record, and the honest limits.
See the EvidenceLive monthly results for the Horizon Fund, net of all fees and calculated on a time-weighted basis by an independent administrator.
View PerformanceQualified investors, advisers, family offices and institutional allocators can request the technical paper and full validation record under NDA — the complete year-by-year record, the data validation evidence, how the testing was built, and the research we ran and rejected. It does not include the specification, which stays in-house.
Access is subject to NDA and verification of investor status. Helion Strategies reviews each request and reserves the right to decline. Interests are offered only through the applicable offering documents.
Informational only. This page describes Helion Strategies’ investment philosophy. It is not an offer to sell or a solicitation of an offer to buy any security, and it is not investment, tax or legal advice. Interests are offered only through the applicable confidential offering documents to eligible investors; those documents control in the event of any conflict with this page.
Opinion. Statements on this page about other strategies, structures and product types — including option-selling and income-oriented approaches — are Helion’s opinion, are general in nature, and are not statements of fact about, or a recommendation regarding, any specific product, sponsor or manager. Other approaches may be appropriate for investors with different objectives.
Illustrations are conceptual. The “two shapes” figure illustrates the general form of convex and concave return profiles. It is not drawn to scale, is not derived from backtested or actual data, and does not represent the performance of any strategy, fund or account.
Hypothetical and backtested figures. Drawdown figures referenced on this page (approximately −78% and −65% unmanaged, and −38% and −23% with the discipline applied) are backtested / hypothetical results on real observed listed SPX option prices, presented in full with methodology and limitations on the Backtest page. Backtested performance is not indicative of future results, is prepared with the benefit of hindsight, and does not reflect actual trading, financing, liquidity constraints, or the emotional factors of real investment decisions. The fixed-income / reserve component of that testing is a calibrated proxy rather than observed data. Where returns are referenced, they are shown net of an illustrative 2% management / 20% incentive fee model (8% soft hurdle, full catch-up, high-water mark). They are the strategy book’s research return, not the live, audited net-of-fee return of any fund.
Advisory framework. The exposure-management framework described here is advisory: it produces exposure recommendations reviewed and executed by the CIO. It does not automatically execute trades, and it does not guarantee any protection or outcome.
One strategy, two vehicles. The philosophy described here governs the Helion strategy as implemented in both the Helion Strategies Horizon Fund and the Helion Strategies Meridian Fund. Those vehicles differ in legal structure and investor eligibility, not in investment approach. Nothing on this page is a presentation of either fund’s live results; live performance is reported on the Performance page.
Risk. Options strategies are complex and involve substantial risk. A long-dated convex sleeve can experience large drawdowns, and characterizations of other approaches on this page reflect Helion’s opinion, not a statement about any specific product. Investors can lose principal. Nothing herein is a guarantee of returns, risk reduction, downside protection, liquidity, or successful execution. Diversification does not assure a profit or protect against loss.
