FLAO uses options in an effort to moderate losses on the S&P 500 over a six-month period that starts each April and resets in October (or vice versa). The fund foregoes some upside return as well as the S&P 500s dividend component, because the options are written on the price (not total) return version of the index. In exchange for preventing realization of the first 5% of the S&P 500s losses, investors forego upside participation above a certain threshold, which is reset semi-annually.