ACE Strategies

Diversified Premium Collection Strategy (DPC).

This strategy combines the profit-generating potential of our core strategy, the Stock Index Premium Collection (SIPC) strategy with opportunistic trading in any other index, financial or commodity future. The SIPC strategy has demonstrated that it can be productive in up-trends, downtrends and non-trending consolidations. In this strategy our goal is to gather returns on a consistent, monthly basis.

Financial and commodity futures offer a wider spectrum of trading opportunities. As experienced commodity traders, we know that over the course of a year individual commodities might not offer attractive investment (or trading) situations at all times. So, among the 36 commodities we currently track daily which spread over eight different market complexes (interest rates, metals, currencies, food and fibers, grains, energy, meats and livestock as well as stock indices), we are always on the alert for compelling opportunities when they do occur in one or more in the group. There are many ways to identify these opportunities, but for the most part they occur for reasons that affect pricing due to circumstances that depart from the norm. Examples might be anomalies in interest rates or cross-currency values, acute product shortages, or overly abundant supply that can affect the marginal producer or the captive customer.

Price distortions result, which, when they are not fatal to the existence of the commodity itself (almost never) can be reasonably expected to self-adjust to the norm, over time. Trading positions are taken accordingly. Sometimes the price distortion corrects quickly, resulting in a short-term trade. Other times, for seasonal and other reasons, the price adjustment may require a longer time frame. These opportunities are often difficult to anticipate exactly, in terms of time-of-entry or duration of the investment period, so advance planning cannot be precise.

It is our practice, in this strategy, to assign subordinate allocation of principle to carefully selected financial and commodity future opportunities in the interest of enhancing portfolio growth and adding beneficially to portfolio diversification.

The trading process depends entirely on the Advisor's assessment of the relevant details of the opportunity, and the most appropriate tactical approach to take. The key considerations are the fundamentals of the particular market, the stage of price development, and the estimate of the amount of time remaining to resolve the anomaly.

Depending upon the situation, the Advisor may use any of a large number of trading tactics, such as, taking long or short positions in the future itself, or in combinations using a variety of spreading techniques, bull or bear spreads, calendar spreads, ratio spreads, etc. Other situations could tactically favor options individually or in straddles or strangles, condors, butterflies or a large number of other combinations. The advisor will decide the best tactical execution of the strategy.

The larger opportunity that we see in this overall strategy is to combine selective commodity trades with the S&P strategy in the interest of increasing the overall return and providing a measure of diversification to the S&P approach.

While the focus of trading in the DPC is still the S&P 500, we believe the diversification into other futures and commodities potentially provides more opportunity than trading just the S&P to increase the overall return.

We have two programs in this strategy, as well, Regular and Institutional. Both implement the identical strategy but the larger principle required (see below) for the Institutional program affords that program greater trading flexibility.

Diversified Premium Collection Strategy - Minimum Starting Value Required *
Regular Program $75,000
Institutional Program $250,000

Lesser amounts may be accepted solely at the discretion of the Advisor.
*Stated minimums are net of any front-end fees.

THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.  ONE MUST BE AWARE THAT THE POSSIBILITY OF UNLIMITED LOSS EXISTS IN WRITING OPTIONS.  PEOPLE CAN AND DO LOSE MONEY.