Market Speculators LLC

Transcription

1 Market Speculators LLC Disclosure Document and Managed Accounts Agreement 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. Market Speculators LLC and its principals make no guarantees, express or implied, concerning the accuracy of this Disclosure Document. Although reasonable care has been applied, it is up to you to perform due diligence and decide whether investing with Market Speculators LLC is right for you. You may only invest with Market Speculators LLC if you are a person a) related to the principals of Market Speculators LLC, b) a friend of the principals of Market Speculators LLC, or c) an indirect friend through a relative of the principals of Market Speculators LLC. Additionally, you must be an accredited investor and clearly understand the potential risks and rewards associated with investing. Please refer to the investor qualification form on page 14 to determine whether you meet the conditions of accredited investor status. Key Features of the Investment Program: Minimum Investment is $50,000 Shorter term Trend Following trading to complement other longer term investment strategies. Forex trading may help you diversify your portfolio. All forex transactions will occur in the interbank market. Potentially uncorrelated performance to traditional investments. Several currencies may be traded at the same time for diversification purposes. As of the date of this Disclosure Document, 15 have been selected. Currency pairs may be bought or sold. No long-only or short-only portfolio trading. Trading system is designed to capture volatile and quiet trends but will not capture every trend. Trading system is designed to reduce total market exposure when underlying conditions are not conducive to trading some or many currencies. Trading system is designed to find trades that may have lower risk. Automated trading utilized to help achieve consistent trading results. Separately managed account so you may monitor all trading activity in real-time. Performance fees paid only on realized profits that exceed the high watermark. No lockdown period. A fee may be assessed if the managed account is closed before its 1 year anniversary if the maximum drawdown you specify in the client agreement is not exceeded. 1

2 RISK DISCLOSURE STATEMENT THE RISK OF LOSS IN FOREX TRADING 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 ALSO BE AWARE OF THE FOLLOWING: FOREX TRANSACTIONS ARE NOT TRADED ON AN EXCHANGE, AND THOSE FUNDS DEPOSITED WITH THE COUNTERPARTY FOR FOREX TRANSACTIONS MAY NOT RECEIVE THE SAME PROTECTIONS AS FUNDS USED TO MARGIN OR GUARANTEE EXCHANGE-TRADED FUTURES AND OPTIONS CONTRACTS. IF THE COUNTERPARTY BECOMES INSOLVENT AND YOU HAVE A CLAIM FOR AMOUNTS DEPOSITED OR PROFITS EARNED ON TRANSACTIONS WITH THE COUNTERPARTY, YOUR CLAIM MAY NOT RECEIVE A PRIORITY. WITHOUT A PRIORITY, YOU ARE A GENERAL CREDITOR AND YOUR CLAIM WILL BE PAID, ALONG WITH THE CLAIMS OF OTHER GENERAL CREDITORS, FROM ANY MONIES STILL AVAILABLE AFTER PRIORITY CLAIMS ARE PAID. EVEN CUSTOMER FUNDS THAT THE COUNTERPARTY KEEPS SEPARATE FROM ITS OWN OPERATING FUNDS MAY NOT BE SAFE FROM THE CLAIMS OF OTHER GENERAL AND PRIORITY CREDITORS. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FOREX TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. MANAGED ACCOUNTS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES AND THE ACCOUNT MAY NEED TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETING OR EXHAUSTING ITS ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE ACCOUNT MANAGER (SEE PAGE 8-9). THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND SIGNIFICANT ASPECTS OF THE FOREX MARKETS. THEREFORE, YOU SHOULD CAREFULLY REVIEW THIS DISCLOSURE DOCUMENT BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT (SEE PAGES 6-7). NATIONAL FUTURES ASSOCIATION HAS NEITHER PASSED UPON THE MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT. THIS MONEY MANAGER IS PROHIBITED BY LAW FROM ACCEPTING FUNDS IN THE TRADING ADVISOR S 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. 2

3 Table Of Contents Contents Market Speculators LLC... 1 RISK DISCLOSURE STATEMENT... 2 Table Of Contents... 3 Business Background... 4 Trading Program... 5 Principal Risk Factors (1)... 6 Principal Risk Factors (2)... 7 Fees (1)... 8 Fees (2)... 9 Estimated Performance Disclosure Estimated Internal Proprietary Performance Estimated Client Proprietary Performance Opening an Account Investor Qualification Form Client Agreement Deposit and Withdrawal Form

4 Business Background General Information Market Speculators LLC (MS LLC) was formed on December 21, 2005 to complete three important tasks; build wealth for you and for us, distribute a biblical warning not to worship the image of the beast, and to provide assistance to the needy in the name of the Lord Jesus Christ. There have been no complaints or lawsuits, pending or concluded, against Market Speculators LLC or any of its principals. We are not currently registered with the NFA but we are subject to the regulations imposed by the CFTC to deal justly and truly with you. Contact Information Market Speculators LLC 5038 S Hardy Dr. Apt Tempe, AZ United States of America (602) mailto:admin@marketspeculators.com Principal Peter Apfelbacher, Co-Founder of Market Speculators LLC Mr. Peter Apfelbacher has been studying the Bible for several years to understand the ways and teachings of Jesus Christ. He holds no degree but has the tenacity to seek the Truth by understanding scriptures in the Bible and by his experiences in life. He has been programming trading systems in the MetaTrader language for over 5 years. He is primarily responsible for trading system development and automation programming. He has been trading currencies in the Forex market since 2004 using both manual and automated trading strategies. 4

5 Trading Program Instruments Traded Any forex currency pair based on the US Dollar, Australian Dollar, Japanese Yen, British Pound, Euro, Canadian Dollar, New Zealand Dollar, and Swiss Franc may be traded in your account. Some forex currency pairs may not be traded due to exorbitant additional costs in the form of spread markups or interest rate differentials or lack of liquidity. Short Term Trend Following Trends can be clearly seen in everyday life. An example is a weather trend in which the average monthly temperature varies as time passes. All profits and losses are generated due to trends. A trend is simply a price change over a period of time. Some of these price changes may be large and may bring in sizable profits. Market Speculators LLC uses an automated trading strategy that consists of several components in an effort to capture important trends. Our complete strategy includes components that help manage risk, size positions, and manage positions. There are no profit targets to existing positions and positions may become highly leveraged. All positions are entered based on changes in price over time. Fundamentals seem to push the idea that price changes are caused by some fundamental conditions. But profitability is actually based on the price change itself and not our thoughts of how fundamentals affected prices. What to Expect when Following Trends It is important for you to understand that this investment program may require a year or more to become profitable. Short term gains may be sacrificed in an attempt to capture larger trends. There may be times when few, if any, trends exist and times when many trends exist. Also, the size of those trends relative to the risk involved may vary. We firmly believe that there is no way to eliminate losses and losing periods but their effects may be controlled by swiftly closing losing positions and proper position sizing. Because of this and other factors, you can expect fluctuations, also called volatility, in your managed account. Our trading strategy was built on the premise that an important trend may happen anytime for any currency. We intend to make every effort to capitalize on these important trends to help you become more profitable. Every trend will not be captured but we firmly believe that being disciplined and patient will help ensure we capture the important trends. 5

6 Principal Risk Factors (1) Notes This disclosure document may not discuss every risk possible when investing with us. Because of this, please seek a financial services professional if you do not understand the scope of the risks involved. Market Speculators LLC shall not be held liable for any losses in your account except when caused by gross negligence up to an amount based upon recent collected fees. Electronic Trading Risks When trades are placed electronically through the internet, certain risks are involved. Risks include a) losing internet access, b) being unable to transmit an order to the broker, c)failure or malfunction of hardware and software components used to transmit orders and receive market information, and d) the broker is unable to execute a transmitted order. This may result in you receiving a worse price for an order or being unable to execute an order. Trading Risks You may experience losses in your account due to certain costs involved in placing and maintaining trades. These costs may include spreads, slippage, price gaps, and interest fees for holding positions. Slippage usually occurs when we are unable to open or close positions in your account at the price we intended to. Slippage can be helpful or hurtful to your account equity. Forex trading is very risky likely due to the high level of leverage. This leverage can cause gains and losses to be substantially larger than an unleveraged investment. Position sizing may cause investment leverage to be higher. Investment Risks Consecutive losses in your account may be caused by unfavorable market conditions and may last for a long period of time. Because of this, you may not be well suited for this investment. If you intend to deposit or withdraw funds, please complete the Deposit or Withdrawal Form in this Disclosure Document and contact us. Failure to notify us in advance may result in a margin call on existing positions. Existing positions will not be increased but may be decreased and margin calls will not be met. As a result, existing positions may reflect more or less risk than originally intended. Future position sizes will reflect the Deposit or Withdrawal amount. 6

7 Principal Risk Factors (2) Broker Risks Since Market Speculators LLC is not permitted to receive funds from you, you are responsible to open an account with Citi FX or any other FCM supporting the MetaTrader platform. In the event that the Bank or FCM would become bankrupt, your claim would be categorized as a general claim and may not receive priority. Please see page 2 for additional risk disclosures. Because Forex transactions are off-exchange, there are no guarantees that the broker will be able to execute a trade to enter or exit a market for any currency. All broker risks are your responsibility and we recommend you carefully research Citi FX before choosing to invest. Taxes Any profits in your account may be taxable. It is your responsibility to find out what taxes apply to your account and to pay them. Please seek advice from a competent tax advisor. Conflicts of Interest Market Speculators LLC and its principals (we) are permitted to trade on own behalf. However, a different broker will be used to help ensure that our proprietary trading will not directly conflict with trading for your account. Because a trading signal could occur at the same time on both trading platforms and differing brokers may provide different price feeds, there are no guarantees that your order will be placed at the same time or price as ours. Variations of the trading system may be utilized in the event that there is insufficient liquidity to execute large orders. Trading these variations will likely affect your account performance as compared to trading just the original version of the trading system. Other accounts may be traded in addition to yours. We reserve the right to use a money manager s platform to bunch together orders for all accounts. You may receive a worse fill on a trade than if your account was the only account we managed. Citi FX will be responsible for the execution of bunched orders. We do not receive incentives to trade through Citi FX. We intend to pass any available benefits or credits issued from Citi FX to your account. 7

8 Fees (1) Structure 1/12% Monthly Management Fee and 20% Monthly Performance Fee based on realized profits that exceed the high watermark assessed on a monthly basis. Definitions Account Equity: The equity in your account without considering profits and losses from active market positions. Initial Account Equity: The amount of money initially deposited into your managed account. Account was Active: The number of days automated trading was active on the managed account. Management Fee The incentive for us to trade your account is 1/12% of your account equity each month. The fee is paid monthly and will be assessed according to this formula: (1% / 12) * (Account Equity Monthly Performance Fee ) * (Days in Month the Account was Active / Number of Days in the Month) Please note that waiting to place trades qualifies as trading your account. If deposits or withdrawals are made and your account has open trades, the Account Equity used in the calculation will not include the deposit or withdrawal until the open trades are closed. Performance Fee The performance fee is 20% of realized gains if those gains caused your account balance to go above the highest balance you had since trading for your account commenced. The formula for the monthly performance fee is: (Account Equity Initial Account Equity Accumulated Withdrawals and + Accumulated Deposits since inception 4.0 * Accumulated Performance Fees from all previous months) *.20 Please note that all performance fees are paid through the account and are not part of the accumulated withdrawals. 8

9 Fees (2) Deposits and Withdrawals Please notify Market Speculators LLC using the Deposit and Withdrawal form found in this Disclosure Document especially if you intend to withdraw more than 25% of your current account equity. Current market positions may be reduced in the event of a significant withdrawal. Current market positions may have increased volatility than what you might normally experience. Factors for increased position volatility include the size of the deposit or withdrawal in proportion to the current account equity and the timely submittal of a Deposit and Withdrawal form. Withdrawals over 25% will likely result in closing or reducing all active positions. Market Speculators LLC shall not be liable for profits that would have been obtained had the active positions been held to a timely exit as indicated by our automated software. Withdrawals causing the account to drop below the Account Minimum may result in cessation of trading. In the event you wish to close your managed account before the first anniversary date of the managed account, we reserve the right to potentially assess the remainder of the 1/12% Monthly Management Fee on the account equity prior to the withdrawal for each month up to the 1st anniversary date. This right will be rescinded in the event that the maximum drawdown you specify in the client agreement is exceeded. Please note that you are not required to have us cease trading in the event the maximum drawdown you specify is exceeded. If you choose to continue to have your account traded, you will be subject to both the management and performance fees. 9

10 Estimated Performance Disclosure Statement NEITHER THIS TRADING MANAGER NOR ANY OF ITS TRADING PRINCIPALS HAS PREVIOUSLY DIRECTED ANY ACCOUNTS. Accounts Traded Proprietary trading performance, our in-house trading, may be provided to you at our discretion. Proprietary performance does not take into account fees that would have been charged. All performance metrics provided are only estimates and you should view them as such. Since the account size is small, the performance may not accurately reflect the performance you would have received had you invested during the performance period. You can expect larger investments to be traded with a higher trading volume and, therefore, may incur additional slippage. Client trading performance will be provided on an estimate basis when available. Performance metrics are calculated using the definitions on this page using monthly statements made available by the broker. Performance Definitions Monthly Performance: ( End of Month Equity - Start of Month Equity - Unrealized Profits + Unrealized Losses) / Start of Month Equity Yearly Performance: ( Latest Month of Current Year Equity - Start of Current Year Equity - Unrealized Profits + Unrealized Losses) / Start of Current Year Equity Maximum Drawdown: Largest drop in Account Equity on a monthly basis or since inception. Performance Notes All performance information provided is estimated and is based on sources believed to be accurate. As a result, all performance information is not guaranteed to be accurate. We recommend viewing results more as a statement of potential benefits to you rather than any reliable indication that the past results shall be repeated in the future. Performance Statement PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 10

11 Estimated Internal Proprietary Performance Name of Trading Program IntelliSys Date Money Manager began Trading Program 11/24/2013 Date Money Manager began Trading Accounts Not Applicable Total Assets Under Proprietary Trading $5, Estimated Maximum Monthly Drawdown 0.0% Estimated Maximum Drawdown 0.0% Number of Client Accounts Open 0 Number Of Client Accounts Closed with Profits 0 Range of Lifetime Returns for Accounts Closed with Profits 0.0% Number Of Client Accounts Closed with Losses 0 Range Of Lifetime Returns for Accounts Closed with Losses 0.0% PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Month January 0.0% February 0.0% March 0.0% April 0.0% May 0.0% June 0.0% July 0.0% August 0.0% September 0.0% October 0.0% November -1.6% December Year To Date -1.6% All Performance Estimates are Gross of Fees 11

12 Estimated Client Proprietary Performance Name of Trading Program IntelliSys Date Money Manager began Trading Program 11/19/2013 Date Money Manager began Trading Accounts Not Applicable Total Assets Under Management $0.00 Estimated Maximum Monthly Drawdown 0.0% Estimated Maximum Drawdown 0.0% Number of Client Accounts Open 0 Number Of Client Accounts Closed with Profits 0 Range of Lifetime Returns for Accounts Closed with Profits 0.0% Number Of Client Accounts Closed with Losses 0 Range Of Lifetime Returns for Accounts Closed with Losses 0.0% PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Month January 0.0% February 0.0% March 0.0% April 0.0% May 0.0% June 0.0% July 0.0% August 0.0% September 0.0% October 0.0% November 0% December Year To Date 0.0% All Performance Estimates are Gross of Fees 12

13 Opening an Account Disclosure Document Please read this Disclosure Document carefully to understand the potential benefits and risks associated with investing with us. Submit any questions you have to or via the Contact Us page. Please allow at least 24 hours to respond. Investor Qualification Form and Client Agreement Complete and sign the Investor Qualification Form and Client Agreement. Then mail them to: Confirmation Market Speculators LLC 5038 S. Hardy Dr. #1119 Tempe, AZ We will notify you that we have received the forms using the contact information you provided in the Client Agreement. Please proceed to the next step after we contact you. Forex Broker Citi FX has been selected to be our primary due to liquidity, support of automated systems software, and capitalization. Open an individual or corporate account by visiting them at citifxpro.com. Fund Account Fund the account with the initial deposit amount indicated on the client agreement you already completed. Commencement of Trading After processing all of the aforementioned forms and have all log in information for your account, trading ought to begin within a few business days. No fees are assessed until live trading commences. 13

14 Investor Qualification Form Confirm Understanding of Disclosure Document Please check each box if you are an individual investor or represent an entity, whether formally or informally formed for the purpose of investment. Yes, I am at least 18 years of age. If an entity, all individuals involved are at least 18 years of age. Yes, I have completely read and understood the Disclosure Document. Yes, I have understood the risks outlined in the Disclosure Document and there may be other risks that were not disclosed in this document. Yes, I understand that I am solely responsible for all losses in my account. Fees may be wholly or partially reimbursed at our discretion if gross negligence occurs on our part. Confirm Accredited Investor Status Please select the box that most accurately describes you or the entity you represent. You are a financial institution including banks, savings and loan associations, brokers, dealers, insurance companies, registered investment companies, development companies, small business investment companies, and other institutions. You are a charitable organization, corporation, or partnership with assets exceeding $5,000,000. You are a natural person whose individual net worth, or joint net worth with your spouse, at the time of either his purchase in the exempt pool or his opening of an exempt account exceeds $1,000,000. You are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of $300,000 in each of those years and you have a reasonable expectation of reaching the same income level in the current year. Signature Validating Accredited Investor Status Signing this form permits Market Speculators LLC to treat you or the company you represent as Accredited Investors Individual or Agent Signature Date 14

15 Client Agreement Individual or Agent Information First Name: Last Name: Company Name: Address: City: State: Zip Code: Telephone: ( ) Cell Phone: ( ) Address: Mailing Address: City: State: Zip Code: Initial Deposit Maximum Drawdown $.00. % Fee Structure 1/12% Monthly Management Fee and 20% Monthly Performance Fee on realized profits that exceed the watermark high assessed monthly. Signature of Individual or Agent The undersigned has clearly understood and agrees to be bound by the terms and conditions of this Disclosure Document. By signing you confirm that, a) you have the financial resources to enter into this agreement, b) you met the accredited investor qualification, c) you clearly understood the risks of trading and that you could lose your entire investment, d) you confirm having read and understood the entire disclosure document, and e) if you are an entity, your company has resolved to enter into this agreement. Individual or Agent Signature Date 15

16 Deposit and Withdrawal Form Individual or Agent Information First Name: Last Name: Company Name: Address: City: State: Zip Code: Telephone: ( ) Cell Phone: ( ) Address: Mailing Address: City: State: Zip Code: Deposit or Withdrawal Amount Please enter the dollar amount you wish to deposit or withdraw. For withdrawals, please precede the amount with a negative sign or the word 'minus'. For deposits, please precede the amount with a positive sign or the word 'plus'. This form is only for existing clients who wish to deposit or withdraw funds. $.00 Signature of Individual or Agent The undersigned has clearly understood the policy of Market Speculators LLC regarding deposits and withdrawals. Withdrawals may cause positions to be reduced for risk management purposes. When positions are reduced, Market Speculators LLC assumes no liability for lost profits. Future positions will be adjusted accordingly. Individual or Agent Signature Date 16