A balanced, model-driven approach.
Cayler Capital invests globally long and short in a diversified range of liquid energy instruments, including exchange traded futures, options and other related instruments by following a systematic investment process that is predicated on six proprietary oil models. Three fundamental and three technical models identify trends, reversals, and long term fundamental shifts in global oil balances.
Using strict risk management practices, Cayler Capital takes advantage of asymmetric pricing discrepancies in the options markets to create skewed return profiles.
Allows us to generate alpha from pricing discrepancies. The market is currently undergoing a re-pricing of longer term energy contracts due to the recent volatility and supply / demand imbalances.
Drive short term (2 to 4 weeks) trading decisions while long term Supply and Demand models drive longer term (12 months) portfolio positioning.
Ability to be nimble and trade the entire barrel allows us to capture pricing discrepancies and arbitrage opportunities as they arise.
Portfolio Manager: Brent Belote
Management Fee: 2%
Incentive Fee: 20%
Minimum Account: $250,000 (negotiable)
Notional Account Minimum: 50%
Margin to Equity: 15% to 25%
I graduated from the University of Southern California with a BS in Accounting in 2005 and followed it up with the MBA program at New York University with a specialization in quantitative finance and economics.
After graduation, I was recruited by JP Morgan where I ran the North American crude book for 5 years. I spent the majority of that time building and running oil models that would eventually become the framework of Cayler Capital’s algorithmic and fundamental proprietary systems.
In 2013 I transitioned to the US Products book, where I focused on trading gasoline and heating oil volatility. This was a great opportunity to round out my knowledge of the entire oil barrel as well as focusing on a pure volatility portfolio.
The opportunity is that we have just experienced one of the greatest shakeouts ever in the oil markets and my longer term supply and demand model is indicating that we are approaching a supply deficit.
We have cut over $250 billion in capex since 2014 and have now entered the rebalancing phase. The long term prices in the oil markets do not align with the cost of production needed to satisfy demand, thus giving a tremendous buying opportunity. The recent OPEC agreement has further confirmed my beliefs and strengthened my resolve that this is the greatest oil investing environment in the last decade.
We will focus on trading the WTI, Brent, Gasoline, and Heating Oil futures, swaps, and options markets.
We will utilize the various options markets to catch longer term trends that our models have identified.
We will be running 3 fundamental and 3 technical trading models to identify breadth and depth of various oil moves.
Our risk profile will aim for a 3:1 profit to loss ratio on each trade with strict drawdowns on each position.
"The fundamental models will focus on pipeline flows, refinery cracks, time spreads, total inventory, physical arbitrage, and macroeconomic indicators. The technical models will focus on the technical aspects of price discovery and will utilize trend following techniques, DeMark Indicators, pivot points, Fibonacci levels, and a multitude of proprietary relationships in the oil markets."