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The shadow X-Fund traders, renamed O-Funds for the purpose of this exercise,
have produced sharply different results, based on the individual approaches
for the baskets of contracts.
Due to an illness, I had been away from work then end of last week and have
not been able to update you or my newsletter readers. But here are the
results at the end of one week and one day.
Bill Wynne's basket of long March Corn, Short March NASDAQ, Long March Swiss
Franc and Long March Bonds is not the biggest mover, but is the biggest
gainer. This O-Fund shows a value of $109,850, meaning it has accumulated
$9,850 in marked to the market gains.
Bob Heisler was not far behind, with an O-Fund value of $108,282.50 as of the
close of Monday. Bob's basket of Short March Dow, Short Feb Hogs, Long March
Soymeal and Long March Bonds has impressive gains in 3 of the four markets
and a $20 gain in the fourth for a total marked to the market gain of
$8,282.50 so far.
My randomly picked portfolio (chosen from a box with slips of paper), shows
a net loss of $435, giving my O-Fund a value of $99,565. My picks were short
March Copper, Long March Cotton, Long March Euro Dollars and short March
Kansas City Wheat.
Lastly, Mark Brown's O-Fund was the big mover (down), heavily long the stock
market, showed a loss of $16,427.50. His O-Fund value at the end of today
was $83,572.50 based on the starting value of $100,000. Mark's picks were
Long March Dow, Long March Nasdaq, Long March S&P 500 and Long March Bonds.
These O-Funds will settle versus the settlements of this coming Friday, when
our intrepid traders will need to publish their picks for the next O-Fund in
the cycle. The O-Funds, like their soon to be X-Fund brethren, are a 14 day
cash settled product. O-Funds are for fun and demonstration, X-Funds will be
for real.
This new product presents a completely different time frame for traders. The
designers of the baskets need to come up with positions they think will have
movement and value at the end of the two week period, with no ability to take
profits in the underlying X-Fund components in the interim. However, the
X-Fund trader can capture profits, or protect against loss by trading the
components versus the fund basket. So don't read to much into the results.
Anyway, here are the results so far. Keep in mind that you may not have been
able to replicate these results in real time because the starting value was
based on the previous Friday's close. Those prices might never have been
able to be realized.
Regards,
John J. Lothian
President
Electronic Trading Division
The Price Futures Group, Inc.
Disclaimer: This email is strictly the opinion of its writer, and not
necessarily those of The Price Group and its management, and is intended
solely for informative purposes and is not to be construed, under any
circumstances, by implication or otherwise, as an offer to sell or a
solicitation to buy or trade in any commodities or securities herein named.
Information is obtained from sources believed to be reliable, but is in no
way guaranteed. No guarantee of any kind is implied or possible where
projections of future conditions are attempted.
Futures and options trading involves risk. Past results are no indication of
future performance.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF
WHICH ARE DESCRIBED BELOW. NO PRESENTATION IS BEING MADE THAT ANY ACCOUNT
WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN
FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE
RESULTS AND ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING
PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE
GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL
TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD
CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING.
FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR
TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO
ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS
RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC
TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF
HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL
TRADING RESULTS.
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