STRATEGIC AG TRADING
39150 County Road J
Mancos, CO 81328
(970) 533-9805
COMMODITY TRADING ADVISOR DISCLOSURE DOCUMENT
THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE
MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR HAS THE COMMISSION PASSED
ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT.
THE DATE OF THIS DISCLOSURE DOCUMENT IS FEBRUARY 15, 2008.
THIS DOCUMENT IS CONSIDERED OUTDATED AFTER NOVEMBER 15, 2008.
THE DELIVERY OF THIS DISCLOSURE DOCUMENT AT ANY TIME
DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE SHOWN ABOVE.
RISK DISCLOSURE STATEMENT
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. In considering
whether to trade or to authorize someone else to trade for you, you should be
aware of the following:
If you purchase a commodity option you
may sustain a total loss of the premium and of all transaction costs.
If you purchase or sell a commodity
future or sell a commodity option you may sustain a total loss of the initial
margin funds and any additional funds that you deposit with your broker to
establish or maintain your position. If
the market moves against your position, you may be called upon by your broker
to deposit a substantial amount of additional margin funds, on short notice, in
order to maintain your position. If you
do not provide the required funds within the prescribed time, your position may
be liquidated at a loss, and you will be liable for any resulting deficit in
your account.
Under certain market conditions, you may
find it difficult or impossible to liquidate a position. This can occur, for example, when the market
makes a "limit move".
The placement of contingent orders by you
or your trading advisor, SUCH AS a "stop-loss" or
"stop-limit" order, will not necessarily limit your losses to the
intended amounts, since market conditions may make it impossible to execute
such orders.
A "spread" position may not be
less risky than a simple "long" or "short" position.
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.
In some cases, managed commodity accounts
are subject to substantial charges for management and advisory fees. It may be necessary for those accounts that
are subject to these charges to make substantial trading profits to avoid
depletion or exhaustion of their assets.
This disclosure document contains, at page 7, a complete description of
each fee to be charged to your account by the Commodity Trading Advisor.
This brief statement cannot disclose all
the risks and other significant aspects of the commodity markets. You should therefore carefully study this
disclosure document and commodity trading before you trade, including the
description of the principal risk factors of this investment, at page 5.
This Commodity Trading Advisor is
prohibited by law from accepting funds in the trading advisors name from a
client for trading commodity interests.
You must place all funds for trading in
this trading program directly with a futures commission merchant.
TABLE OF CONTENTS
Risk Disclosure Statement 2
Forepart 4
Names of Principals 4
Business Background of the CTA and its Principals 4
Principal Risk Factors 5
Trading Programs 6
Fees 7
Conflicts of Interest and Affiliation with Futures Commission
Merchants 9
Commodity Trading by SAT, Its Principals and Associated Persons 9
Litigation 9
Special Disclosure for Notionally Funded Accounts 10
Capsule Performance for SAT Grains Program 11
Capsule Performance for SAT Balanced Program 12
Capsule Performance for SAT Ceres Program 13
Capsule Performance for SAT Adjusted Program 14
Capsule Performance for SAT Options Program 15
Capsule Performance for SAT Intermarket Program 16
Capsule Performance for SAT Energy Program 17
Notes to Capsule 18
Acknowledgment of Receipt of SAT’s Disclosure Document 19
Skyline Management, Inc.
d.b.a. Strategic Ag Trading “SAT”), is a Wyoming corporation whose principal
office is located at 39150 County Road J, Mancos, CO 81328. SAT maintains one
branch office; 141 West
Jackson, Suite 1520A, Chicago, IL 60604, the phone number is (312) 786-4114.
The books and records of SAT are maintained at the Mancos office. Its telephone number is (970) 533-9805.
NAMES OF PRINCIPALS
Robert Wiedeman and Karen
Sullivan are equal shareholders in SAT.
BUSINESS BACKGROUND OF THE CTA AND ITS PRINCIPALS
Skyline Management, Inc. d.b.a.
Strategic Ag Trading began doing business as a Commodity Trading Advisor (CTA)
in February, 1999. The principal business of Strategic Ag Trading is to trade
and advise clients in trading commodity futures contracts and options on those contracts. It is registered with the Commodity Futures
Trading Commission (CFTC) as a Commodity Trading Advisor and is a member of the
National Futures Association (NFA). The
same trading strategy has been used since 1993.
Capsule Performance information
can be found beginning on Page 11.
Robert Wiedeman
Robert Wiedeman was granted
registration as a Floor Broker in January, 1982 and remained registered until
August, 2003. In February of 2004 Mr. Wiedeman was again granted registration
as a Floor Broker and remained registered until December, 2005. From June of
1991 to July, 2000, Mr. Wiedeman was a principal of FC Stone Group, Inc., a FCM
in West Des Moines, Iowa. From April, 1989 until July, 2000, Mr. Wiedeman was
the branch manager of the Chicago office of Farmers Commodities
Corporation. From July, 2000 to December
of 2000 Mr. Wiedeman was a principal of FC Stone, LLC, a FCM in West Des
Moines, Iowa. From July, 2000 to September of 2000 Mr. Wiedeman was a Branch
Manager of FC Stone, LLC, a FCM in West Des Moines, Iowa.
Since February of 1999 Mr.
Wiedeman has been an associated person, trading principal and branch manager of
Strategic Ag Trading’s branch office located in Chicago, IL.
Karen Sullivan
From July of 1986 until
January, 1991 Ms. Sullivan was an associated person (“AP”) of Futures and
Options Trading Group Inc. an IB. In September of 1988 Ms. Sullivan became an
AP of Fundamental Futures Inc. a Commodity Trading Advisor (CTA), and remained
registered until December, 2002. From
July 1991 until March, 1993 Ms. Sullivan was an AP of Risk Management Inc.,
formerly Glen Oak Investments, Inc. a CTA.
From March, 1996 until June, 1998 Ms. Sullivan was an AP and branch
manager of Nessler Futures Trading Company a CTA. Ms. Sullivan was registered as
an AP of SDK Investments, Inc. a CTA from September, 1995 until February, 1999.
Since February, 1999 Ms.
Sullivan has been an AP and principal of Strategic Ag Trading.
Jack R Frymire
Jack
R. Frymire was granted registration as a Floor Broker in April, 1986 and has
remained registered since. He was
approved and has remained registered as a Principal at Iowa Grain Co since
March, 1987. In March of 1993 he was
approved as a Principal of Iowa Grain Fund Management LLC. He withdrew as a
Principal of Iowa Grain Fund Management LLC in June, 2006.He was approved as a
Principal of Prime Investment Services, LLC in May of 1997. In December, 1999 he was approved and
remains registered as a Principal, NFA Associate Member, and an Associated
Person of EHEDGER LLC. He was approved
and has remained registered as a Principal of
Oak Clearing Services LLC in August, 2004.
In December, 2005 he was approved and has remained registered as a
Principal of Iowa Grain Investment Advisors LLC. He was approved and has remained registered
as a Principal of Iowa Grain Commodity Management in April, 2006. In June of 2007 Mr.
Frymire became registered as a Trading Principal and Associated Person of
Strategic Ag Trading.
Charles Wickens
Charles Wickens, born in
1955, received a Bachelor of Science degree in Agricultural Industries from the
University of Missouri in 1977.
Following his graduation Mr. Wickens went to work for Continental Grain
in Minden, Nebraska. In 1978 Mr. Wickens
was hired by Pillsbury to run their West Coast trading operation out of
Omaha. In 1980 he was transferred to the
corporate headquarters in Minneapolis to be the export manager for Pillsbury’s
Soybean Desk. The job consisted of
coordinating soybean trading for more than 80 river elevators along with
trading the company’s CIF and FOB positions.
Mr. Wickens was then hired by Hennessy & Associates, a Chicago Board
of Trade Commission House, where he handled major export, domestic and
speculative accounts from the trading floor, and, after a year, was named a
partner in the firm. In 1987, Mr.
Wickens became an independent trader.
Since March of 1990 Mr. Wickens has been registered as a floor broker.
Mr. Wickens joined SAT in February, 2002 as an associated person
(‘AP”), and trading principal of the SAT Grains Program.
PRINCIPAL RISK FACTORS
As stated in Risk Disclosure
Statement on Page 2 of this Disclosure Document, the risk of loss in trading
commodities can be substantial. Those
risks include, but are not limited to, those outlined in that Risk Disclosure
Statement and risks specific to this trading program as follows. Strategic Ag Trading trades primarily in the
agricultural markets. A client who
invests with SAT will not have the benefit of diversification resulting from
trading in several different markets.
Since SAT does not usually trade in non-agricultural futures or options,
clients of SAT will not participate in large moves occurring in other markets,
such as the currencies, financials, metals or soft commodities such as coffee and
cocoa.
Market Price Movements Can Be Highly Volatile. Furthermore, the markets may become illiquid
due, for example, to daily price fluctuation limits, making it impossible for a
trader to close out a position against which the market is moving. On the other hand, speculative position
limits or other market constraints may prevent SAT from acquiring positions
otherwise indicated by its strategy, eliminating profit opportunities or making
it impossible to protect against further losses. This combination necessarily implies a high
degree of risk. Futures trading is a
zero sum, risk transfer activity in which, by definition, for every gain there
is an equal and offsetting loss rather than a mutual participation over time in
economic growth. The success of your
account depends entirely on SAT's ability to predict or follow future price
movements or otherwise implement its trading strategies, and there can be no
assurance whatsoever that SAT will be able to do so successfully.
Commodity Trading Is Speculative And Volatile. Commodity interest prices are highly
volatile. Price movements for commodity
interests are influenced by, among other things: changing supply and demand
relationships; weather; agricultural, trade, fiscal, monetary, and exchange
control programs and policies of governments; United States and foreign
political and economic events and policies; changes in national and
international interest rates and rates of inflation; currency devaluations and
revaluations; and emotions of the marketplace.
None of these factors can be controlled by SAT and no assurance can be
given that SAT's advice will result in profitable trades for a participating
customer or that a customer will not incur substantial losses.
Commodity Trading Is Highly Leveraged. The low margin deposits normally required in
commodity interest contract trading (typically between 2% and 20% of the value
of the contract purchased or sold) permit an extremely high degree of leverage. Accordingly, a relatively small price
movement in a contract may result in immediate and substantial losses to the
investor. For example, if at the time of
purchase 10% of the price of a futures contract is deposited as margin, a 10%
decrease in the price of the contract would, if the contract is then closed
out, result in a total loss of the margin deposit before any deduction for
brokerage commissions. A decrease of
more than 10% would result in a loss of more than the total margin deposit. Thus, like other leveraged investments, any
trade may result in losses in excess of the amount invested.
When the market value of a
particular open position changes to a point where the margin on deposit in a
participating customer's account does not satisfy the applicable maintenance
margin requirement imposed by the customer's FCM, the customer, and not SAT,
will receive a margin call from the FCM.
If the customer does not satisfy the margin call within a reasonable
time (which may be as brief as a few hours), the FCM will close out the
customer's position.
SAT could be unable to recover
assets held at a FCM, even assets directly traceable to the Client-- from the
FCM in the event of a bankruptcy of the FCM.
Although FCM’s are required to segregate customer funds pursuant to the
Commodity Exchange Act, there is no equivalent in the unlikely event of the
FCM's bankruptcy, of the Securities Investors Protection Corporation insurance
applicable in the case of securities broker dealer bankruptcies.
From time to time, SAT may
convert all commodity futures and options positions to cash or cash
equivalents.
SAT's trading program includes
both the buying and selling of options on futures contracts. Option strategies may or may not be
coordinated with positions in underlying futures contracts. In general, the use of options by SAT
increases an account's margin requirements and may increase volatility as well.
Price movements of commodity
futures contracts can be influenced by, among other things: changing supply and
demand relationships; weather, government trade and fiscal policies; national
and international economic events; and changes in interest and currency
exchange rates.
Most United States
commodity exchanges limit fluctuations in commodity futures contract prices
during a single day by regulations referred to as "daily price fluctuation
limits" or "daily limits."
The Trading Advisor primarily conducts trading on the Chicago Board of
Trade. Historically futures prices may have reached the daily price limit for
any or all of the commodity futures traded by the Trading Advisor. During a single trading day, no trades may be
executed at prices beyond the daily limit.
Once the price of a futures contract for a particular commodity has
increased or decreased to the limit point, positions in the commodity can be
neither taken nor liquidated unless traders are willing to effect trades at or
within the limit. Commodity futures
prices have occasionally moved the daily limit for several consecutive days
with little or no trading. Similar occurrences could prevent the client from
promptly liquidating unfavorable positions and subject the client to
substantial losses, which could exceed the margin initially committed to such
trades.
It should be noted that clients
are free to choose the FCM or introducing broker through whom their accounts
trade. Most clients are currently
clearing through Iowa Grain Company. SAT
recommends that each prospective client familiarize himself with the services,
experience, and integrity of any futures commission merchant or introducing
broker with which he does business. SAT
accepts no responsibility for the selection of a client's clearing agent.
TRADING PROGRAMS
In order to offer clients as
much diversification as possible, Strategic Ag Trading offers three programs for clients to choose from. The SAT Grains program, traded by Charles
Wickens, the SAT Balanced, traded by Robert Wiedeman, and the SAT Ceres Program, traded by Jack Frymire. SAT 1, SAT 2, SAT Inter-Market, SAT Adjusted,
Options and SAT Energy are closed.
SAT may alter its trading
methods, including without limitation, trading systems, commodity futures
markets traded, and trading principles, without approval by the Client if SAT
determines that such changes in methods are in the best interest of the Client. All trades made by Strategic Ag Trading will
be on regulated U.S. exchanges.
SAT AGRICULTURAL PROGRAMS
All of the agricultural
programs currently offered by SAT use fundamentals to help determine trades to
one degree or another. SAT Agricultural Programs trade primarily in the
agricultural futures and options, but may trade non-agricultural futures and
options on occasion. Factors that affect the supply and demand of a particular
commodity in order to predict future prices are looked at. As an example, some of the fundamental
factors that affect the supply of a commodity (e.g., corn) include the acreage
planted, crop conditions such as drought, flood, and disease; strikes affecting
the planting, harvesting, and distribution of the commodity; and the previous
year's crop carryover. The demand for
commodities such as corn consists of domestic consumption and exports and is a
product of many things, including general world economic conditions, as well as
the cost of corn as a feed in relation to the cost of competing products such
as soybean meal. In addition, historical
and seasonal patterns are reviewed, which may indicate the direction the market
may move in the future.
Decisions whether to trade a
particular commodity contract are also based upon various factors including
liquidity, diversification, and crop potential, both historical and at a given
time. The decision not to trade certain
commodities for certain periods, or to reduce the number of contracts traded in
a particular commodity might result at times in missing a significant profit
opportunity which otherwise might be captured by other strategies
The trading guideline and the
experience of SAT traders, are factors upon which decisions concerning the
percentage of managed assets to be used for each commodity traded and the size
of the positions taken or maintained.
SAT may also decide to increase or decrease the size of a futures
position (long or short) from time to time.
Such decisions require the exercise of subjective judgment and include
consideration of the volatility of the particular futures market, the pattern
of price movement, open interest, volume of trading, changes in spread
relationships between various contract months and between related commodities,
and overall portfolio balance and risk exposure. No assurance is given, however, that
consideration of any or all of these items will be made with respect to every
trade, or that consideration of any of the above in a particular situation will
lessen the risk of loss.
SAT GRAINS
The SAT Grains Program is
traded by Charles Wickens. The trading
methods used by Mr. Wickens combine both fundamental and technical analysis
with the ultimate determinations made on the basis of fundamental analysis. The Program trades in the agricultural
markets. Mr. Wickens’ analysis also looks at certain technical factors, such as
the price of a commodity in relation to its price during previous periods, open
interest, and volume. These factors are
generally used by Mr. Wickens to assist in determining when to liquidate
positions.
The trading philosophy is
threefold: fundamental, technical and innate.
“In the long run, the fundamentals of the grain markets ultimately win.”
Mr. Wickens’ cash trading experience, coupled with the constant influx of fundamental
contacts, allow him to stay close to the pulse of the market. Mr. Wickens
constantly monitors both the short- and long-term technical picture, but he
also tries to be aware of the intra-market technical opportunities. The third category of the trading philosophy
is defined as innate. Consistent,
successful trading is not just a chart point or a new fundamental development,
but the ability to decipher all of the inputs and determine which is relevant
to the market at this juncture.
In summary, the most
important attribute to longevity and profitability in today’s market is the
ability to change. Change does not
necessarily mean bullish or bearish, but, increasing or decreasing position
size; whether to take profits or let them run; to trade or not to trade; an
aggressive or a patient posture; an emerging market or the end of the trend; to
name a few instances.
SAT BALANCED
The SAT Balanced Program is
traded by Robert Wiedeman. The trading
methods used by Mr. Wiedeman are based on a general overview of fundamentals of
grain and soybean markets and the principle that grain and soybean contracts
have strong relationships. The Program
trades in the agricultural markets.
Mr. Wiedeman’s trading
philosophy consists of three basic strategies:
1) Long and short positions will be hedged in related commodities and/or
with covered options; 2) The Program will not be outright long or short; 3)
Technicals will constantly be monitored to enhance fundamental methodology.
Technical tools are used to assist money management.
SAT CERES
The SAT Ceres Program is
traded by Jack Frymire. Mr. Frymire focuses on the
grains and livestock markets. He does
not alter his focus, but may alter his emphasis as opportunities arise.
Mr. Frymire’s trading style
involves a heavy reliance on his family origins and farming operations to form
the basis of his market analysis. He
also discusses his opinions with other brokers, commercial customers, and other
traders to form a complete fundamental overview of each of the major agricultural
markets. These overviews are typically,
but not always, based on a crop year, livestock cycle, or similar measure. He then reviews technical patterns to
determine entry and exit points.
He may trade and hold any
positions which may or may not be contrary to those held by other accounts
advised by the companies he owns and controls.
FEES
In compensation for its trading
services, SAT charges a quarterly management fee equal to .005 of an account's
Net Asset Value. Payable at quarter-end (approximately 2% per year) and a
quarterly incentive fee equal to 20% of the account's Trading Profits (as
defined below) in each calendar quarter.
SAT may accept partially funded
(notional) accounts. The management fees
charged to the account will be based on the nominal value of the account. To find the percentage of management fees
charged based on actual funds, compute the management fees based on the nominal
funds and divide by the actual funds.
For example, a $50,000 account trading as a $100,000 (200% of actual
funds) account would be charged 2% x $100,000 or $2,000 annually. $2,000 divided by $50,000 (the actual size),
would be 4% annually of actual funds.
The annual management fee is based on nominal account size (actual
equity plus notional funds). In most
cases the maximum nominal account size accepted would be 200% of the amount of
actual funds; therefore, the range of management fees for notionally funded
accounts will be between 2% and 4% annually of actual funds. Occasionally SAT
may allow clients with extensive futures experience to trade a larger
percentage of notional money.
SAT retains the right to charge
accounts different fees structures than those described above. SAT may charge quarterly management fees
ranging from 0-4% per year. SAT may
charge incentive fees ranging from 0-33% of trading profits per quarter.
Criteria used in determining fee levels include, among other things, the size
of the account and the commission level.
However, SAT, in its
proprietary trading account, for the purposes of testing a trading system, may
trade the account at a higher notional value than allowed by clients.
Net Asset Value means generally
the combined total actual assets and any notional capital committed to SAT's
trading program less total liabilities, determined as set forth below. For the purposes of this calculation:
(i) Net Asset Value shall
include any unrealized profit or loss on securities, open commodity positions
and less accrued commissions.
(ii) Net Asset Value shall
include actual and notional funds.
(iii) All securities and open
commodity positions shall be valued at their then market value, which means
with respect to open commodity positions, the settlement price as determined by
the exchange on which the transaction is effected or the most recent
appropriate quotation as supplied by the clearing broker or banks through which
the transaction is effected, except that United States Treasury Bills (not
futures contract thereon) shall be carried at their cost or their market value
as provided by the FCM.
If there are no trades on the
date of the calculation due to the operation of the daily price fluctuation
limits or due to the closing of the exchange on which the transaction is
executed, the contract will be valued at fair value.
Trading Profits (for the
purpose of calculation SAT's fee only) during a calendar quarter shall mean (i)
the net of profits and losses resulting from all commodity trades closed out
during such quarter, plus (ii) the net of any profits and losses on commodity
trades open as of the end of such quarter, less accrued commissions, minus
(iii) any profits and losses carried forward on open commodity trades from the
preceding calendar quarter, minus (iv) the account's "Carry Forward
Loss" (as defined by the following sentence), if any, as of the beginning
of the calendar quarter, minus (v) management fees paid to SAT, plus (vi)
earned interest. If the total of items
(i) to (vi) above is negative at the end of the calendar quarter, such amount
shall be "Carry Forward Loss" for the next calendar quarter.
With regard to the "Carry
Forward Loss" if the Client withdraws funds from the account during a
period when there is such a "Carry Forward Loss", the loss shall be
reduced, at the time of the withdrawal, by the percentage obtained by dividing
the amount of the withdrawal by the account's Net Asset Value immediately
before the withdrawal.
The Quarterly Management Fee
will be paid whether or not an account has a profit. However, the incentive fees are payable only
on new Trading Profits in an account.
For example, if an account incurs a loss after an incentive fee payment
is made, SAT will retain the payment but will receive no further incentive fee
in subsequent quarters until the account has recovered such loss and generated
new Trading Profits.
The Quarterly Management Fee is
due and payable on the last business day of each quarter and incentive fees are
due and payable on the last business day of the applicable period. Shortly after the end of the quarter SAT will
prepare an invoice setting forth the amount of quarterly management fees and/or
incentive fees payable to SAT and shall furnish such invoice to the FCM
carrying the account. Upon submission of
the invoice, SAT is authorized by the Client to have these fees deducted
directly from the account. Upon request,
SAT shall furnish the Client with a copy of the invoice presented to the
FCM. The Client agrees to make payment
to SAT of applicable management fees and incentive fees within fifteen business
days of the date the invoice is submitted.
SAT may at times cause futures
or options transactions to be executed by brokerage firms other than the one at
which the accounts are carried. Clients
agree to pay any additional charges, which shall not exceed $2.00 per side on
such trades for the transfer of the futures or options positions to the
carrying brokerage firm.
Strategic
Ag Trading may at times pay a portion of collected fees to third parties for
referral services.
Additions,
withdrawals and net performance will affect the nominal account size and
therefore rates of return and management fee charges. Additions
and withdrawals do not change the notional amount or the agreed on trading
size, this can be done with an amendment to the management agreement.
CONFLICTS OF INTEREST AND AFFILIATION WITH FUTURES COMMISSION
MERCHANTS
A commodity trading advisor
(CTA) who earns commissions has an incentive to generate commissions by more
frequent trading, which could be in conflict with his responsibility as a CTA
to pursue a profitable trading strategy without regard to commission
generation. This may create the incentive for the advisor to overtrade the
clients account. SAT may receive commissions on accounts at some of the FCM’s
it trades through. The range of commissions is $1.00-$5.00. Clients are free to
choose the FCM their account trades through.
At times, there could be a
conflict of interest when the Trading Principals or SAT, as a result of a
neutral allocation system, testing of a new trading system, or trading of a
proprietary account in a more aggressive fashion, takes a position in a
proprietary account which is opposite to or ahead of that taken for a client
account. It should be noted that SAT or
the Trading Principals may take such positions in the above situations.
The incentive fee
arrangement entered into between the Advisor and its clients might create an
incentive for the Advisor to make investments that are risky or speculative as
the Advisor would be partaking in the net performance of the clients’ account.
Charles Wickens maintains
registration as a floor broker, but does not function as a floor broker.
Jack Frymire is a principal
of Iowa Grain Co., but clients are free to choose a FCM of their choice.
COMMODITY TRADING BY SAT, ITS PRINCIPALS AND ASSOCIATED PERSONS
The Principals and Associated
Persons of SAT have traded commodities for their own accounts and will continue
to do so in the future. This could
involve a conflict of interest in that their personal trades could be in
competition with accounts managed by SAT in seeking execution of trading
orders. No Principal or Associated Person of SAT will knowingly or deliberately
favor their personal trading accounts over those of clients of SAT. Clients may
not inspect the personal trading records of SAT’s Principals or Associated
Persons.
From time to time, the Trading
Principals and SAT may advise additional accounts, including publicly offered
commodity pools, which together with accounts already being advised could
increase the level of competition for the same trades selected by the Trading
Principals. The positions of all
accounts controlled by the Trading Principals and SAT will be aggregated for
the purpose of speculative position limits.
Thus, an account advised by SAT or the Trading Principals may be unable
to enter into or maintain a certain position, which when added to the open
contracts held by other account controlled by SAT or the Trading Principals,
would exceed applicable position limits.
SAT thus has a conflict of interest between benefiting from managing
more funds and limiting the assets under management in order to reduce the
possible effects of competition for trades or aggregation of positions. The level of competition for the same trades
selected by the Trading Principals could also affect the priorities of order
entry, but the Trading Principals will not deliberately or knowingly favor any
account advised by them over any other account.
Other than as stated above, SAT
is not aware of any conflicts of interest with any Futures Commission Merchant
or any Principal of a Futures Commission Merchant.
FURTHER INFORMATION AVAILABLE UPON REQUEST.
Any client or prospective client of SAT desiring further
information concerning SAT may request such information by contacting SAT at
the mailing address or telephone number listed in this disclosure document.
LITIGATION
There has never been a material
administrative, civil, or criminal proceeding against SAT or its
principals.
