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18.29. Limitation on Option Writing Risk

The number of call options an Investment Compartment can write is limited by the total assets the Investment Compartment holds and is further limited by the fact that all options represent 100 share lots of the underlying common stock. Furthermore, the Investment Compartment’s options transactions will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities on which such options are traded. These limitations govern the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert, regardless of whether the options are written or purchased on the same or different exchanges, boards of trade or other trading facilities or are held or written in one or more accounts or through one or more brokers. Thus, the number of options which the Investment Compartment may write or purchase may be affected by options written or purchased by other clients of the Manager. An exchange, board of trade or other trading facility may order the liquidation of positions found to be in excess of these limits, and it may impose certain other sanctions.