High-yield short-term promissory notes

Oaktower Capital issues high-yield short-term promissory notes to accredited investors and deploys the proceeds in a systematic 0DTE (zero-day) options credit-spread strategy. Investors hold a note with a stated 18–24% coupon paid monthly; the trading is how we aim to fund it. The coupon is contractual but not guaranteed — you could lose your entire investment.

What are high-yield short-term promissory notes?

A promissory note is a written promise by an issuer to repay borrowed money with interest. High-yield short-term promissory notes combine three features: a high stated interest rate relative to conventional fixed income, a short maturity (often a few months to about a year), and the legal form of a promissory note — a debt obligation of the issuer. High-yield short-term promissory notes are securities, and here they are offered only to verified accredited investors under Rule 506(c).

How Oaktower’s high-yield short-term promissory notes work

• Stated rate. 18–24% per annum, fixed for the note’s term.*
• Interest. Paid monthly.*
• Short term. Short maturities, so capital recycles quickly.*
• Unsecured. General obligations of the issuer unless the note documents state otherwise.
• Eligibility. Verified accredited investors only, under Rule 506(c).

The stated coupon on our high-yield short-term promissory notes is contractual — but whether it is actually paid depends entirely on the issuer’s trading results, described next.

The engine: 0DTE zero-day options and credit spreads

The return that funds the notes comes from selling credit spreads on 0DTE options — “zero days to expiration,” options that expire the same trading day. A credit spread sells one option and buys a further out-of-the-money option of the same type and expiration, collecting a net premium while capping the maximum loss.

• 0DTE / zero-day options. Major index options now expire daily; we open and close 0DTE positions the same session, so there is no overnight risk.
• Far out-of-the-money credit spreads. We sell low-delta put credit spreads, call credit spreads, and iron condors designed to expire worthless, so we keep the premium.
• Defined risk. Every credit spread has a known maximum loss — the strike width minus the premium — because we always buy a protective wing.

Selling 0DTE credit spreads far out of the money gives a high probability of profit on each trade, but the premium is small next to the capped loss, and near expiration 0DTE gamma is high — a fast intraday move can turn a winning credit spread into a full loss quickly. High probability of profit is not the same as low risk. See how the strategy works.

Why short-term?

Short maturities let capital recycle quickly and let the notes reprice to current conditions rather than locking in a rate for years. Short-term does not, however, reduce the underlying risk: repaying a maturing high-yield short-term promissory note still depends on the issuer’s 0DTE trading results and its capital.

Who can invest?

The notes are offered under Rule 506(c) to verified accredited investors only. Self-certification is not sufficient; accredited status must be verified through documentation or a qualified third party.

Risks of high-yield short-term promissory notes

High-yield short-term promissory notes are speculative and carry a high degree of risk. Key points:

• Not guaranteed. The stated rate is contractual, not a guarantee that interest or principal will be paid.
• Fixed obligation, variable engine. A fixed monthly coupon is funded by a variable 0DTE options credit-spread strategy that can lose money; payments can be reduced, delayed, or stopped.
• Unsecured / default. If unsecured, you rank behind secured creditors in an insolvency and may recover little or nothing.
• Illiquid. No secondary market; the notes are generally held to maturity.
• Not insured. Not bank deposits, not FDIC insured, not guaranteed by any third party or government program.
• Total loss possible. You could lose your entire investment.