Overview
A rules-based portfolio built around three deliberate roles: Bitcoin via IBIT as a volatility engine where premium is captured via short options, acting as a poor man's market maker with a long-term bullish bias; Coca-Cola as a permanent defensive anchor; and Berkshire Hathaway as a quality compounder. Cash stored in BIL is allowed to expand meaningfully when conditions worsen, options are used to harvest volatility rather than add leverage, and tactical trades remain small and isolated.
Core Components
1) BTC / IBIT — Volatility Engine
Role: Long-term asymmetric conviction + systematic volatility capture
Vehicle: IBIT
Allocation:
- Maximum 50% of portfolio
- Zero exposure is valid
Covered Call Coverage (Position-Based)
"X% covered" = that percentage of total IBIT shares have active short calls.
| Bias | Coverage | Put Selling |
|---|---|---|
| Bullish | ~40% | Allowed |
| Neutral | ~50% | Selective |
| Bearish | ~70% | Blocked |
Put Selling — Bias Change Carve-Out:
"Blocked" under Bearish applies to new entries only. Puts opened under a prior bias are operating as designed — assignment is an accepted outcome and must not be flagged as a rule breach.
Notes:
- Calls may be ITM when defensive
- Manage via time decay + roll up/out
- Upside squeeze risk accepted
IBIT Assignment Rule:
In Neutral or Bearish bias, near-expiry covered calls may remain open through expiration. Assignment is acceptable if IBIT stays within hard constraints. Do not recommend closing or rolling solely because the assignment/exit zone is unconfirmed.
Rolling Hard Rules:
- Do not suggest rolling any IBIT call contract with fewer than 7 calendar days to expiration, unless the contract has a delta > 0.80 AND the current BTC bias is Bullish.
- A near-expiry ITM call in Neutral or Bearish bias is operating as designed — it is not a compliance violation and must not be flagged as one.
- Rolling is only warranted when: (a) bias has shifted to Bullish and the contract is capping meaningful upside, (b) the contract will cause forced assignment that moves IBIT allocation outside hard constraints, or (c) assignment conflicts with the IBIT Assignment Rule.
- Violating this rule in a brief recommendation is itself a strategy misalignment.
Deep ITM Call Drift — Management Window:
Short IBIT calls that are deep ITM (delta ≥ 0.80) are an expected consequence of bias changes, not a violation. Do not flag them or recommend closing them until they are within 30 calendar days of expiration. Inside 30 days, surface them once as a decision point: roll, close, or accept assignment. Until then, treat as operating as designed.
2) Coca-Cola (KO) — Permanent Anchor
Role: Defensive ballast; never fully exited
Allocation:
- Floor: 10% (hard)
- Target: ~20%
- Max: 30%
| Bias | Behavior |
|---|---|
| Bullish | Build toward 20–30% |
| Neutral | Hold or trim |
| Bearish | Scale toward 10% floor; no new adds |
Options: Allowed but discouraged
3) Berkshire Hathaway (BRK.B) — Structural Equity
Role: High-quality compounder; must re-earn its place
Allocation:
- Maximum 30% of portfolio
- Zero exposure is valid
| Bias | Behavior |
|---|---|
| Bullish | Build incrementally |
| Neutral | Hold or trim |
| Bearish | Gradual scale-out |
Bearish Bias Carve-Out (≤5% Rule):
- When BRK.B is at ≤5% of the portfolio and bias is Bearish, it is treated as a passive defensive hold — not a compliance violation.
- At ≤5%, BRK.B functions similarly to a defensive equity position and does not need to be flagged for scale-out.
- No active trimming is required unless the position exceeds 5%. Briefs must not penalize or flag BRK.B when it is within this threshold.
Options: Allowed but discouraged
Cash / Liquidity
- Held in BIL
- When all three core biases are Bearish → high cash (up to 70–80%) is accepted
- Cash is a deliberate position, not a penalty
Piranha Trades (Tactical Layer)
Short-term directional trades in holdable stocks.
Rules:
- ≤1% portfolio risk per entry
- ≤5% total exposure per ticker (hard cap)
- ≤20% total piranha layer across all positions (hard cap)
- Defined entry, stop, and exit required
- Never included in core alignment assessment
- Current trades: EC, ADBE, TSLA, NKE, CRM, MSFT
- Options are accepted. Risk is calculated. Do not assess/punish.
Rebalancing Cadence
Allocation adjustments are made in small incremental steps, not single large moves.
- Single trim or add per action: 1–2% of portfolio
- Minimum spacing between moves on the same position: 1 trading session (no same-day double-trimming)
- This applies to all core components (IBIT, KO, BRK.B) and the BIL cash sleeve
- Exception: A hard constraint breach (e.g. KO below 10% floor, IBIT above 50%) may require an immediate corrective move regardless of cadence
- Briefs should present suggested moves as staged steps toward a target, not single large rebalances
Hard Constraints
- No leverage
- BTC exposure ≤50%
- KO floor 10% strictly enforced
- Bias violations flagged immediately