GPAM SSOS JAN 2016 +1.51%

Dear Investors,

We started the year on a positive note with a gain of +1.51%.  This result occurred in spite of our Live Cattle spreads underperforming and also the Eurodollar curve flattening during the month.  We would like to remind you that the strategy is not directional, so we did not benefit for the big directional movement of January.  We are proud to say we still has a low correlation to the S&P 500, just 0.01%.

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GPAM SSOS YTD 3.29% DEC 2015 3.79%

Dear Investors,

2015 has come to an end, with the strategy finishing up 3.29% for the year. This is the seventhconsecutive positive year for the strategy. In a rather tumultuous year for the global markets, we were able to navigate through the abnormalities and produce a positive year. For reference, the image below displays the 2015 returns across different markets:

dec_2015_1

(Past performance is not indicative of futures results)
Source:
http://managed-futures-blog.attaincapital.com/2016/01/04/final-2015-asset-class-results/

As you can see, our strategies returns are favorable when compared to the managed futures space and the overall market place. In our opinion, this demonstrates the strategies ability to manage risk and adjust to the markets. As we mentioned in November, we had a huge deviation in one of our hog fly trades, which finally ended well and we were able to cover it at the beginning of December with a minimal loss. Also in December, we began the implementation of live cattle trades to the strategy. This market had a rather strong bounce, moving more than $20 (15%) in just a few days. This resulted negatively for the overall strategy, but as we continue to mention, the addition was a long-term play

Looking forward, we have strong expectations for 2016. With crude oil at the lowest level in 10 years, we see opportunities to make money in this market. We are currently setting up different futures trades on crude oil focusing on the forward curve, where we hope to benefit from the strong contango.

For Grains 2015 was a strong “el Niño” season, which presents a large possibility that 2016 will be an “La Niña”. If so, this can negatively affect the crops during the summer period and we are putting together a group of trades to benefit.

In the meat market, we expect volatility in the live cattle markets, with a price increase in the Q2 due the lower than normal Cattle-on-feeds in December. This will make us reduce our bear spread position at the end of January and we will set up new trades to benefit from a price increase. In the hog market we expect a normal season year, the production and also the demand seems to be normal. We are starting our summer trades in June, July and August hogs.

The Eurodollar curve is flat, and appears to be flattening out even. Here the problem comes from the expectation of the market of the rate hike. In December we saw a hike for 0.25 bps, and the Fed was telling us then they will rise 3-4 more time. But as we look now to the GE market we can see that is expecting just 1, 40% or none 33.9% rate hike in 2016. See image below:

dec_2015_2

This made the Eurodollar forward curve flatten. We have flys and spreads on the long end of the curve 2017+ and this situation is not the best, unfortunately we will need more time to cover them at our target price.  But in this king of strategies the only way to make money is to be patient.

Click Here to download the Dec 2015 PDF

As always if you have any question please do not hesitate to contact us.

Thank you for your trust.

Thanks,

Gregory Placsintar 
Principal/Head Trader
Miguel Sanz Castello
Back Office

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

GPAM SSOS YTD -0.48% NOV -7.22%

Dear Investors,

Sadly, November’s results were negative for us. The result can be contributed largely to our lean hog strategy. The contracts typically trade between $2 and -$2 on the close of November. At month end, the settlement price was $6.4 which resulted in the drawdown.

With our lean hog strategy, we try to seek the deviations because statistics tells us that most deviations after a certain period of time trend toward the median price. There are two causes of deviations that we assess. The first is due to fundamental factors (i.e. Supply & Demand, shortage ect.) and the second is due to abnormal technical factors. Both factors need to be analyzed in order to determine the movement of the market. In our opinion, the deviation that took place in the lean hog market in November was due to the latter. Specifically, it was caused by the technical buying of contracts using strategies like bounce and trend line set-ups without the support of the fundamental factors. This reaction had a positive effect on the future market, especially towards the end of the month, pushing the December lean hog contract well above the cash price.

Finally the market, and as always the cash market, won the battle. Today, the December contract trades much closer to the cash price, and we were able to cover our strategy, at a normal price, recovering the loss we had in November.

One important thing for you to note is that trade was on the edge of our monthly stop, as you remember we have a monthly stop protection of 6% drawdown. The stop never took place because we were down just 4-5% on the last day of November, and in the close of the hogs the fly moved from $5-to $6,4 in a few seconds, so we lost another 2% during the pit close.

Currently, we are focusing on live cattle spreads and starting to build the same strategies in the grain market, for the next year. We are preparing also a few protection strategies in case “El Niño” affect the grain market negatively.

Additionally, we are adding to our Eurodollar positions. We believe that if and when the Fed raises the rates, it will benefit the “blue” part of the forward curve. This curve is very flat compared with the “Red”, “Green” or even the “Yellow” part.

It was a difficult year with less opportunities than in the past but as I always say, trading is a long-term run, like a marathon, and one has to know how to manage his energy (money) from the beginning until the end. If not, he can‘t finish the race.

Click Here to download the Nov 2015 PDF

If you have any questions please do not hesitate to contact us at your convenience.

Thanks,

Gregory Placsintar 
Principal/Head Trader
Miguel Sanz Castello
Back Office

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

GPAM SSOS +6.65% YTD +3.30% SEP

Dear Investor,

The month of September was positive for our SSOS strategy,  up +3.30%, now we are at +6.65% this year.

Click Here to download the Sep 2015 PDF

If you have any questions please do not hesitate to contact us at your convenience.

Thanks,

Gregory Placsintar 
Principal/Head Trader
Miguel Sanz Castello
Back Office

 

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

GPAM SSOS YTD +7.27% OCT +0.58%

Dear Investor,

As we approach the end of the year, market volatility has been higher than expected. This has created less trading opportunities for the strategy. This has been particularly evident in the Wheat and Soybean markets, as we have had to close our positions earlier than anticipated.

We are also seeing unusual activity in the meats market. Specifically, the Live Cattle markets have been working as anticipated, however the Lean Hogs markets have not.  We are currently trading a butterfly strategy in the lean hogs that has a range of 2-3 points ($1200-$1600) and this year we are seeing 5-6 ($2000-$3000) point movement, which is a large deviation from the price and is increasing the volatility in our strategy. This is extremely unusual and is not something that we anticipate to continue.

The Eurodollar(GE) curve has remained flat. We have however been able to take profit in some of our positions. If the curve slope remains constant, we will be able to take more profits in our open positions.

With an increase in attention to long term goals, we are also starting to implement spreads that have a long-term approach (2016-onwards).

As always, if you have any questions please do not hesitate to contact with me.

Click Here to download the Oct 2015 PDF

If you have any questions please do not hesitate to contact us at your convenience.

Thanks,

Gregory Placsintar 
Principal/Head Trader
Miguel Sanz Castello
Back Office

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

December 2013 +3.05% YTD 4.37%

Dear Investors,

Dic 2013 +3.05 YTD 4.37%

Another year has passed, the fifth year of Seasonal Spread and Option Strategy (SSOS). It has been a difficult year, but we have achieved a 4,37% gain.(Past performance is not necessarily indicative of future results.

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September 2013 -2.87% YTD -0.89%

Dear Investor

Sep 2013 -2.87% YTD -0.89%

A hard month in which things have not changed a lot. In addition, for this month we have the issues of the government shutdown  in the USA, now at least it looks they would return to business as usual, something that would make the markets relax a bit.

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August 2013 -2.36% YTD 2.05%

Dear Investors,

Another difficult month, a month in which things have radically changed within two days. The market is inverted in many unknown ways and all this results that things are turning hard and the worst of all is that they are irrational.

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July 2013 +3.21% YTD 4.50%

Dear Investor,

July +3,21% YTD +4,50%

Finally, a month that is more quiet and in which some of the spreads have worked. I see it as one battle won, but to win the war we need more. The market continues to be very volatile with rather abrupt movements. This becomes more marked in August when most of the traders are on vacation and the interns are in charge!

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