Optionality with Training Wheels
Capturing Sponsor-Led Upside with Trust-Floor Downside Protection
We’ve constructed a focused event-driven SPAC basket rooted in a core principle: when the structure itself limits your downside, you gain the freedom to allocate into asymmetric upside without overexposing risk capital. This is not a thematic SPAC punt, it's a rules-based allocation to pre-vote vehicles with embedded capital protection and sponsors with a credible record of dealmaking.
Each position is selected not for what it might become, but for what it already structurally is: a low-drag vehicle tethered to a known liquidation floor, with upside potential tied to the quality and optics of the eventual business combination.
Structural Setup
Pre-vote SPACs offer one of the few remaining examples of built-in convexity in public markets. Through the vote date, each SPAC maintains a hard capital floor, typically ~$10 per share, corresponding to cash held in trust. That means:
Downside is constrained by design
Upside is unlocked via credible deal announcements
Optionality is embedded, not implied
The value lies in the structure, not sentiment. We are not relying on broader market enthusiasm, we are simply allocating into a set of contracts where the worst case is known and the best case is reputation-driven, narrative-led repricing.
SPAC Arbitrage Basket
8 SPACs @ 0.25% each = 2.0% total exposure
Each selection meets three criteria:
Pre-vote status with intact trust floor
Strong or politically relevant sponsor network
Compelling asymmetric setup via potential deal optics or narrative power
Why It Belongs
Each name is a controlled asymmetric bet: you are either buying the sponsor's next act or the market’s mispricing of future narrative momentum. No leverage. No timing stress. No need to "believe."
When risk is limited and reward is reputational, the real game is how much you commit.
We’re not looking to ride the next SPAC mania, we’re looking to own clean convexity with a known floor and a catalyst-rich ceiling.
Risk Considerations
Sponsor Execution Risk – Not every name will announce a compelling deal. That’s why we diversify and stay pre-vote.
Post-Vote Collapse Risk – We avoid the decay phase by limiting to intact trust structures.
Narrative Fatigue – Many SPACs never regain attention. We prioritize sponsor lineage and reputational capital.
Market Illiquidity – Our sizing (0.25% per name) inherently controls for thin volume across names.
Conclusion
Optionality with Training Wheels is about applying discipline to chaos. It is one of the rare ways public equity investors can manufacture convexity without derivatives or leverage, just through positioning within contract structure and sponsor incentives.
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