Glossary

The trade name for the rules-based covered call overlay program operated by Toll Booth Trading LLC. AcuBooth is the client-facing brand, advisor portal, and execution engine identity. All agreements and legal obligations are held by Toll Booth Trading LLC. See also: Toll Booth Trading LLC, Overlay Manager.

The investment advisor or investment advisor representative who holds the primary advisory relationship with a client. In the AcuBooth program, the advisor of record does not change upon enrollment. AcuBooth manages only the covered call overlay sleeve; the advisor of record retains full discretion over the client’s core portfolio.

The process by which the seller (writer) of an option is obligated to fulfill the terms of the option contract when the buyer exercises it. For a covered call, assignment means the underlying shares are sold at the strike price. Assignment typically occurs when the stock price rises above the strike price. Assignment risk is a material consideration for any covered call program.

An option whose strike price is equal or very close to the current market price of the underlying security. ATM options generally have higher time value than in-the-money or deep out-of-the-money options and are commonly used in covered call strategies.

A financial contract that gives the buyer the right, but not the obligation, to purchase an underlying security at a specified price (the strike price) on or before a specified date (the expiration date). The seller of the call receives a premium in exchange for granting this right.

An options strategy in which an investor who owns shares of a security sells (writes) a call option on those same shares. Because the position is “covered” by the underlying holding, the seller can deliver the shares if assigned. The seller collects a premium upfront. The trade-off is capped upside: if the stock rises above the strike price, the shares may be called away at the strike. Covered calls are the core strategy of the AcuBooth program.

An exchange-traded fund that systematically writes covered calls on its underlying portfolio holdings, typically on a fixed schedule (monthly or weekly). Unlike an individually managed overlay, a covered call ETF pools client assets, applies a uniform strategy, and rebalances periodically rather than continuously. Clients hold units of the fund, not the underlying securities directly.

A financial institution (such as a brokerage or bank) that holds client securities and cash in safekeeping. In the AcuBooth program, client assets remain at the custodian at all times. AcuBooth does not take custody of client funds or securities. The custodian’s account statements are the authoritative record of account activity.

AcuBooth’s execution approach uses a set of pre-defined, rules-based criteria to govern every covered call execution decision. “Deterministic” means the outcome of each rule is fully predictable given the inputs—there is no machine learning, AI inference, or probabilistic model involved in trade decisions. Each execution can be traced to the specific rule that triggered it.

The authority granted to a manager to make investment decisions on behalf of a client without seeking prior approval for each transaction. In the AcuBooth program, AcuBooth’s discretion is limited in scope to the execution of covered call strategies on eligible positions within the covered call sleeve, as specified in the overlay agreement. The advisor of record retains discretion over the core portfolio.

The date on which an options contract expires and becomes void. For standard equity options, expiration occurs on the third Friday of the expiration month (or the preceding Thursday if Friday is a holiday). After expiration, the option either expires worthless (if out-of-the-money) or is exercised/assigned (if in-the-money).

The act by which the holder (buyer) of an option invokes their right to buy (call) or sell (put) the underlying security at the strike price. When a call option is exercised against a covered call writer, the writer is assigned and must deliver the underlying shares at the strike price.

In the AcuBooth program, the management fee is assessed on the net asset value of the covered call overlay sleeve only—not the entire client portfolio. This means the fee applies to the portion of the account managed by AcuBooth under the overlay agreement, not to the client’s full holdings at the custodian.

A measure of the market’s expectation of future price fluctuation for a security, derived from the current market price of options on that security. Higher implied volatility generally results in higher option premiums. Implied volatility is a key driver of the income potential from covered call writing and fluctuates continuously based on market conditions.

For a call option, in-the-money means the current price of the underlying security is above the strike price. ITM calls have intrinsic value and carry higher assignment risk for covered call writers. Writing deep in-the-money covered calls generates more premium but significantly increases the probability of assignment.

The fee charged by AcuBooth for managing the covered call overlay sleeve. Assessed annually on the net asset value of the sleeve, billed quarterly in arrears per the overlay agreement. Fee rates are account-specific and established in individual overlay agreements. See Pricing for the published breakpoint schedule.

A list of all available option contracts for a given underlying security, organized by expiration date and strike price. The AcuBooth engine scans 2 million+ option chains per second to identify covered call opportunities across eligible positions. Option chains include both calls and puts at various strikes and expirations.

The price paid by the buyer of an option to the seller (writer). For covered calls, the premium is collected by the account owner when the call is written. The premium is deposited directly into the client’s custodian account. Premium amounts vary based on strike price, expiration date, implied volatility, and other market factors. Premiums are not guaranteed and will differ across market conditions.

For a call option, out-of-the-money means the current price of the underlying security is below the strike price. OTM calls have no intrinsic value but have time value. Writing OTM covered calls generates lower premiums than ATM or ITM calls but reduces the probability of assignment, allowing more upside participation in the underlying position.

The contractual document executed between a client and Toll Booth Trading LLC governing enrollment in the AcuBooth covered call overlay program. The overlay agreement sets out the scope of AcuBooth’s overlay authority, the fee terms (including the account-specific fee rate), eligible positions, and all material terms. All fee disclosures are made in the overlay agreement before signing.

An investment manager whose strategy is applied on top of (“overlaid” on) an existing portfolio without replacing the primary manager or disrupting the core holdings. In the AcuBooth program, AcuBooth functions as an overlay manager for the covered call sleeve, operating within the client’s existing custodian account without changing the advisor of record or core portfolio.

A required disclosure stating that historical performance data does not guarantee future results. Any performance figures, premium improvement ranges, or illustrative results referenced by AcuBooth are subject to this disclaimer. Actual results will vary based on market conditions, account composition, timing, and other factors.

Income generated by selling (writing) options, specifically the premiums received from covered call writing. Premium income is deposited directly into the client’s custodian account upon execution. It is not guaranteed and will vary. Premium income does not constitute a guaranteed return or yield and should not be compared to fixed income instruments without understanding the associated risks.

A firm or individual registered with the SEC or state securities regulators to provide investment advisory services for compensation. Registration imposes fiduciary obligations and regulatory requirements. Toll Booth Trading LLC (d/b/a AcuBooth) is not registered as an investment advisor with the SEC or any state securities regulator. Advisors using the AcuBooth program who are themselves registered retain their own registration and fiduciary obligations to their clients.

An investment execution approach governed entirely by pre-defined, deterministic criteria rather than discretionary judgment or algorithmic inference. AcuBooth’s engine uses 12,000+ rules to determine when and how to write covered calls. No artificial intelligence or machine learning is used in trade decisions. Every execution is traceable to the rule that triggered it.

The portion of a client’s custodian account over which AcuBooth has overlay management authority under the overlay agreement. The sleeve contains the eligible equity positions on which covered calls are written. The sleeve is distinct from the client’s core portfolio, which remains under the discretion of the advisor of record.

An SMA is a discretionary investment-management vehicle in which a registered investment adviser manages an individual client mandate, typically with full discretionary authority over the account. AcuBooth is not structured as an SMA — it is a rules-based covered call overlay program operated under an individual overlay agreement. Toll Booth Trading LLC is not registered as an investment adviser, and the advisor of record for any enrolled account remains the client’s existing advisor. See also: Overlay Manager, Toll Booth Trading LLC.

The price at which the buyer of a call option has the right to purchase the underlying security. For a covered call writer, the strike price represents the price at which their shares may be called away upon assignment. Selecting the strike price is a key parameter in a covered call strategy, balancing premium income against upside participation and assignment probability.

The rate at which the time value of an option decreases as the expiration date approaches, all else equal. Theta is favorable for options sellers (writers): as time passes, the option loses value, benefiting the covered call writer who collected the premium. Theta decay accelerates in the final weeks before expiration.

The portion of an option’s premium attributable to the remaining time until expiration, as distinct from intrinsic value. Time value reflects the probability that the option will move in-the-money before expiration. All else equal, options with more time to expiration have higher time value. Covered call writers benefit as time value decays over the life of the contract.

The legal operating entity behind the AcuBooth brand. All overlay agreements, custodian authorizations, and operating contracts for the AcuBooth covered call overlay program are executed under Toll Booth Trading LLC. Toll Booth Trading LLC is not registered as an investment advisor with the SEC or any state securities regulator. “AcuBooth” is a trade name of Toll Booth Trading LLC. Both “Toll Booth Trading” and “AcuBooth” are reserved trade names; all rights held by Toll Booth Trading LLC.

The security (typically a stock) on which an option contract is based. In a covered call strategy, the underlying security is the stock owned by the investor against which the call option is written. The investor must own at least 100 shares of the underlying per option contract (standard contracts cover 100 shares).

A statistical measure of the dispersion of returns for a security or market index. In options markets, volatility is closely tied to option pricing. Higher volatility generally increases option premiums, which can benefit covered call writers. Volatility can be historical (realized) or implied (market-derived). See also: Implied Volatility.