I will try to cover the most important questions in here, but please feel free to get in touch for any other concerns or ideas! All following information or downloads are confidential and not for publishing or any other unauthorized use!
Why Futures Contracts?
Futures contracts are the most volatile investment vehicle that can be traded 23 hours a day, 5 days a week. The strategy doesn't care if prices rise or fall. It profits when prices move. High volatility is caused by high supply and demand and this causes price movement. Also Futures can be ordered (bought or sold) much faster than stocks or bonds due to it's high trading volume.
How does the strategy work?
Any change of direction (long or short) of a price movement is detected in an early stage, a running trade is closed and a new trade in the opposite direction will be issued. A stop is placed to protect the position and trails along with the price movement. The distance of the trail is constantly optimized and adjusted on the fly. The position size is calculated accordingly and readjusted in case the previous position has been closed in loss. To avoid being trapped in a choppy sideway phase we developed a method that detects consolidation or accumulation and places the entry of a new position outside this sideway range. The strategy places orders dozens of times a day. The holding period lasts between a view seconds and a view hours. The average holding period of a position is 12 minutes. All trades will be closed as soon as an intraday target is reached or the stop loss limit of 2% has been hit. No position is held over weekends or bank holidays.
Whats's the technology behind it?
It all comes down to speed. Therefore we placed our server nowhere else but at the exchange itself: Datacenter 4, Aurora, Chicago Mercantile Exchange (CME). A backup server is located in St. Louis. Our order execution time is usually below 250ms. Slippage below 10ticks. We use the fastest data feed provider available (Rithmic) and are patched directly into the Rithmic Network DMA (Direct Market Access) of the Exchange with an Exabyte Broadband connection and backup. Our execution frontend is the super stable and reliable Agenatrader Andromenda in which our strategy is embedded, coded in C#.
What are the main instruments being traded?
we constantly scan all available CME instruments for the most volatile and only trade 1 or 2 at a time). The instruments we trade most often are: NQ (Nasdaq100), ES (S&P500), GC (Gold), RB (RBOB Gasoline), CL (Crude Oil), NG (Natural Gas), HG (Copper) and UB (Ultra T-Bond)
Why do we trade in the US and not in Germany or UK?
the market participation is much higher, therefor the volume and volatility. The CME offers the best selection of instruments and grants us direct market access (DMA) to the Wall Street: New York Stock Exchange (NYSE) and NASDAQ as well as COMEX, GLOBEX or CBOT!
Which broker do we use?
AMP GLOBAL CLEARING LLC - AMP GLOBAL (USA). For more details visit: https://www.ampfutures.com. After a dozen other broker houses we worked with in the US, UK, Switzerland and Germany we consider AMP the most reliable, professional DMA broker we came across. Also they let us use our preferred frontend and data feed provider and have a 24 hour support desk with quick response!
Any club who does business needs a registered office, obviously. As it doesn't matter from where we allocate funds to and from our US broker, Jersey offers a very investor friendly jurisdiction based on UK law but regulated by the Jersey Financials Commission Services (JFCS). Due to this regulation it is granted that trading profits form the US don't fall under capital gains tax.
What sort of legal entity will the club be?
The "Single Malt Futures Trading Club" will be a Liability Partnership (LP) after Jersey law. For more details please visit: https://www.jerseylaw.je/laws/revised/Pages/13.500.aspx. The LP is limited to 15 members who will all have shareholder status. All shareholders vote for the Managing Director and Secretary of the club.
How many shares are available and what's the price?
150 shares will be available to 15 shareholder. Each share is 2.500€. To give all members a chance for an equal proportion of the stake, each member is granted the right for 10 shares but has no obligation to take them, beside a minimum of 2 shares. Shares not taken can be offered to other members of the club. The club is going to be legally formed as soon as 100% of shares are distributed to 15 applying members. 80% of the shareholder fund (300.000€) will be transferred to the registered broker account of the club and represent the broker cash value which itself will be leveraged by a 10% broker margin (granted by AMP Global). This is giving us the intraday buying power of 3 Million Euro! 20% of shareholder capital remain in the bank account on the Isle of Jersey to cover running costs for the management of the trading account, the virtual office (Vistra Jersey Ltd.), book keeper and legal affairs, main and backup server (Chicago and St. Louis), and the data feed provider (Rithmic).
How much is the management fee?
for the active management of the trading account, operation and control of the strategy, for the risk management and reporting I ask for a monthly fee of 40€ per share. This will be withdrawn form the Jersey bank account at the end of each month. The management fee will be set out in every unprofitable month. 3 consecutive unprofitable month lead to the dissolution of the club and the payout of the remaining funds to each shareholder.
What is the expected profit?
a minimum of 10% per month of the cash account value. In its best performing month (Sept. 2021) the strategy generated 87% (download Broker Account Statement Sept-2021 / August 2021 / July 2021). An even better performance is possible when the risk is increased accordingly. This can only be considered when 100% of shareholders vote for it!
When are profits going to be withdrawn back to the Jersey bank account and passed on to the shareholder
any profits above 20% of the monthly initial balance will be withdrawn or whenever 75% of shareholders request to do so. At least half of the yearly profits will be withdrawn at the end of the year or upon the shareholders decision.
What is the maximum risk
the daily maximum loss is 2% of the cash account balance before a rescue stop is activated and all trades are blocked for the rest of the day. After a consecutive sequence of 5 losing days (or 10% maximum drawdown) all shareholders will be informed to decide on any further trading activities, readjustments of the risk parameters or even the dissolution of the club
How do I apply for a seat in the club?
simply by responding via the following application form. If you like me to invite one of your colleagues, relatives or friends, please let me know!