Our portfolio composition will be constructed using the following breakdown:
- Gap in risk appetite from banks and oil hedge funds, will allow Cayler Capital to generate alpha from pricing discrepancies. The market is currently undergoing a re-pricing of longer term energy contracts due to the recent volatility.
- Proprietary models will drive short term (2 to 4 weeks) trading decisions while long term Supply and Demand models will drive longer term (12 months) portfolio positioning
- Deep fundamental and technical knowledge of energy oil market. Ability to be nimble and trade the entire barrel allows Cayler Capital to capture pricing discrepancies and arbitrage opportunities.
- Diversification across tenors, models, and strategies seeks to mitigate drawdowns while capturing long term profitability.
Cayler Capital will focus on trading the WTI, Brent, Gasoline, and Heating Oil futures, swaps, and options markets. The firm’s trading strategy will utilize the various options markets to catch longer term trends identified by the proprietary models. Cayler Capital will be running 3 fundamental and 3 technical trading models to identify the breadth and depth of various oil moves. The risk profile of the firm will aim for a 3:1 profit to loss ratio on trades with a strict drawdown on each position.
Top Down Investment Process
- Global Macro Outlook
- Global Oil Fundamentals
- Geographic Oil Fundamentals
- Oil Product Fundamentals
- Technical Analysis for trade entry and exit
- Analyze oil fundamental data
– Oil production data – OPEC, Shale, Offshore
– Global oil movements – Pipeline flows, Imports / Exports
– Identify locational arbitrage opportunities
- Run algorithmic trading strategies
– Monitor stops, targets, and size
– Constantly monitoring volatility and rebalancing trade size
- Identify Long Term supply and demand imbalances
- Identify potential trades
- Distill asymmetric ways to express trades
About the Fund
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%
If you’d like more information about investing, we’d be happy to discuss in person or on a call.