Trading the Markets The Institutional Perspective. Jarod Winters

Transcription

1 Trading the Markets The Institutional Perspective Jarod Winters

2 The Institutional Perspective Background Day trading Entered institutional space as software provider 14 years in New York Service company to Merrill Lynch prime (5 years) Consulting (2 years) Wells Fargo Prime (and predecessor) (7 years) Specialized in Hedge Fund Operations Trading Reporting Workflow Currently Relocated to San Diego Crossed over from the Sell-side to the Buy-side Licenses Trading in Futures 1

3 Current Sunrise Capital Partners One of the original quant funds Rick Slaughter Trend-following Infrastructure Futures Investment programs for institutional and individual (qualified and non-qualified investors) Some products compensate performance, some only pay management fee. 2

4 Institutional vs Individual Business economics Regulations & Compliance Opportunity Set Competitive landscape OPM vs YM Advantages of the Individual 3

5 Institutional - Business Economics Overhead People Service providers Regulations Operational Risk Allocations Error trades 4

6 Institutional - Regulations and Compliance CCO Examinations Licenses Quarterly and Annual filings 5

7 Institutional - Opportunity Set Published (and regulated) description of the strategy Disclosure of risks Instruments Liquidity Etc. Reporting and metrics Attribution and exposure 6

8 OPM vs YM Other People s Money Fiduciary Getting paid to take risk Expectations / limited flexibility Style Drift Visibility to investors Size and Opportunities Set Limited by scale 7

9 The Problem with Size The scalability of your strategy can limit you Example: Trading days per month 20 Trades per day 4 Trades per month 80 Winners Losers 60% 40% Profit per share (Winner) $0.50 INDIVIDUAL INSTITUTIONAL Account size $250,000 $250,000,000 Annual Goal 50% 15% Monthly Target $10,417 $3,125,000 Shares per trade ,313 What type of Trade Ideas have the liquidity to absorb 195,000 shares in a trade and remain profitable? 8

10 Individuals - Advantages Size Broad opportunity set for trading Not limited to deeply liquid instruments No pressure to take risk No investors calling Limited operational liability Can collaborate with broader trading community (without appearing like collusion or insider trading) Tools and investment ideas can be implemented faster without bureaucracy (investment committee) 9

11 Disclaimers SOME SUNRISE INVESTMENT PRODUCTS AND STRATEGIES TRADE IN WHOLE OR IN PART IN THE FUTURES MARKETS AND TRADING IN THE FUTURES MARKETS INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER AN INVESTMENT WITH SUNRISE IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION AND YOUR RISK TOLERANCE LEVEL. ANY INVESTMENT MADE IN A SUNRISE STRATEGY OR PRODUCT SHOULD BE MADE WITH DISCRETIONARY CAPTIAL SET ASIDE FOR SPECULATIVE PURPOSES AND SUCH INVESTMENT SHOULD NOT BE MADE UNLESS THE INVESTOR HAS THE FINANCIAL ABILITY, SOPHISTICATION, EXPERIENCE, AND WILLINGNESS TO BEAR THE RISKS PRESENTED BY AN INVESTMENT IN SUNRISE. SOME OF SUNRISE S INVESTMENT PRODUCTS AND STRATEGIES TAKE ADVANTAGE OF THE LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES TRADING AND SUCH LEVERAGE CAN WORK AGAINST, AS WELL AS FOR AN INVESTOR AND LEAD TO LARGE POTENTIAL LOSSES AS WELL AS LARGE POTENTIAL GAINS. SHOULD YOU INVEST IN A SUNRISE INVESTMENT PRODUCT OR STRATEGY AFTER READING AND SIGNING ALL REQUISITE SUNRISE OFFERING AND SUBSCRIPTION DOCUMENTS AND SATISFYING ALL OF SUNRISE S DUE DILIGENCE REQUIREMENTS, YOUR SUNRISE ACCOUNT WOULD BE SUBJECT TO CHARGES FOR MANAGEMENT AND ADVISORY FEES. SUNRISE S FEES MAY BE HIGHER THAN THOSE OF MUTUAL FUNDS OR OTHER COLLECTIVE INVESTMENT VEHICLES AND IN ADDITION, SUNRISE MAY CHARGE A PERFORMANCE OR INCENTIVE FEE ON TOP OF ANY MANAGEMENT OR ADVISORY FEE. THE EXISTENCE OR CHARGING OF SUCH PERFORMANCE OR INCENTIVE FEE MAY GIVE SUNRISE AN INCENTIVE TO INVEST IN A MORE RISKY OR SPECULATIVE MANNER THAN WOULD OTHERWISE BE THE CASE. GIVEN THE FEES SUNRISE CHARGES, IT MAY BE NECESSARY FOR SUNRISE TO MAKE SUBSTANTIAL TRADING PROFITS TO MAKE UP FOR FEES CHARGED AND AVOID DEPLETION OR EXHAUSTION OF THE ASSETS IN YOUR ACCOUNT. SUNRISE S DISCLOSURE AND OTHER OFFERING DOCUMENTS CONTAIN A COMPLETE DESCRIPTION OF THE PRINCIPAL RISK FACTORS IN A SUNRISE INVESTMENT AND EACH FEE TO BE CHARGED TO YOUR POTENTIAL INVESTMENT BY SUNRISE, A COMMODITY TRADING ADVISOR ( CTA ) PURSUANT TO THE REGULATIONS OF THE CFTC AND A REGISTERED INVESTMENT ADVISOR ( RIA ) PURSUANT TO THE REGULATIONS OF THE SEC. THE CFTC REQUIRES THAT PROSPECTIVE CLIENTS OF A CTA RECEIVE DISCLOSURE DOCUMENTS AT, OR PRIOR TO THE TIME AN ADVISORY AGREEMENT IS DELIVERED AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED IN THAT DISCLOSURE DOCUMENT. THE SUNRISE DISCLOSURE DOCUMENT IS READILY ACCESSIBLE TO YOU BY CONTACTING SUNRISE AT OR INFO@SUNRISECAPITAL.COM. NEITHER SUNRISE S MARKETING MATERIALS NOR THIS BRIEF STATEMENT CAN DISCLOSE ALL OF THE POTENTIAL RISKS OF THE MARKETS SUNRISE TRADES OR YOUR POTENTIAL SUNRISE INVESTMENT. THEREFORE, YOU MUST READ AND SIGN THE SUNRISE DISCLOSURE STATEMENT BEFORE YOUR POTENTIAL INVESTMENT WITH SUNRISE WILL BE CONSIDERED. YOU WILL NOT INCUR ANY ADDITIONAL CHARGES BY REQUESTING A COPY OF THE SUNRISE DISCLOSURE DOCUMENT AND UPON YOUR REQUEST, SUNRISE WILL DELIVER IT TO YOU IN HARD AND/OR ELECTRONIC FORM AT NO COST. NEITHER THE SEC NOR THE CFTC HAS PASSED UPON THE MERIT OF INVESTING WITH SUNRISE NOR ON THE ADEQUACY OR ACCURACY OF ANY SUNRISE DISCLOSURE DOCUMENT OR SUBSCRIPTION AGREEMENT. IN ADDITION TO A SIGNED COPY OF THE SUNRISE DISCLOSURE DOCUMENT AND OTHER RELEVANT SUBSCRIPTION AGREEMENTS, YOU WILL BE REQUIRED TO PROVIDE OTHER DISCLOSURE STATEMENTS AND ADDITIONAL DUE DILIGENCE TO SUNRISE BEFORE YOU WILL BE ALLOWED TO OPEN AN ACCOUNT WITH SUNRISE. 10