Managed Futures
     
 

Cordova Capital Management, Managed Futures Investments

Cordova Capital Management (CCM) employs a classic trend following methodology. The strategy utilizes basic and tried principals combined with a variety of proprietary and discretionary trading and risk management techniques in an attempt to achieve client account appreciation through the use of exchange-traded futures contracts. The trend following approach used by CCM was learned by Mr. Cordova from an original member of Ed Seykota’s Trading Tribe, and Mr. Cordova still maintains a close association with this original member.

In general, the CCM approach involves using various price channel indicators and moving average indicators to determine when a market may be trending. These indicators are developed by taking note of a market’s highest high and lowest low over a period of time. This measurement also provides useful insights into market volatility. For example, narrow price channels show low volatility while wider price channels reflect higher volatility. Accordingly, price channels attempt to identify possible market opportunities to initiate both long and short positions. Additionally, CCM uses discretion in applying different “Risk-Per-Trade” parameters within the program. “Risk-Per-Trade” is defined as the amount of initial (minimum) dollar risk as a percent of the “fully-funded” or nominal account value that will be applied to each position or trade for client accounts.

Market Sectors Traded

CCM trades a broad basket of global futures markets representing seven different market sectors. 

Market Sectors Traded

Position Management

The program’s positions may be held for a day, days, weeks, or even months depending on how a particular market may be trading and aligned with the program’s indicators at any given time.  The methodologies and strategies are back-tested against 10 years worth of market data in U.S. markets. Markets traded and position size per market will increase relative to the progressive increase of the Risk-Per-Trade parameter.

Risk Management

CCM employs detailed proprietary risk management methodologies. In general, price stops are used for market entry and market exit with a profit or a loss. The placement of contingent orders for your account, “stop-loss” or “stop-limit” will not necessarily limit losses in fast, gapping, or locked markets.  However, resting orders of this type are a valuable way to protect against adverse market movements. The overall program risk will increase relative to the progressive increase of the Risk-Per-Trade parameter selected for a client account.

 

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Managed Futures

YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN A MANAGED FUTURES ACCOUNT, COMMODITY POOL OR OTHER FORM OF FUTURES INVESTMENT OR TRADING. IN SO DOING, YOU SHOULD BE AWARE THAT FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE POOL OR ACCOUNT AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL OR ACCOUNT.

FURTHER, MANAGED COMMODITY ACCOUNTS AND COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS AND POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. YOU MUST BE PROVIDED A COMPLETE EXPLANATION OF EACH EXPENSE TO BE CHARGED ANY OR OTHER FORM OF MANAGED ACCOUNT BEFORE YOU INVEST TOGETHER WITH A STATEMENT OF THE PERCENTAGE RETURN NECESSARY TO BREAK EVEN AT THE END OF YOUR FIRST YEAR IN THE INVESTMENT.

THIS BRIEF RISK DISCLOSURE STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS NECESSARY TO EVALUATE YOUR PARTICIPATION IN A MANAGED FUTURES ACCOUNT, COMMODITY POOL OR OTHER FORM OF FUTURES INVESTMENT OR TRADING. THEREFORE, BEFORE YOU DECIDE TO PARTICIPATE IN COMMODITY TRADING, YOU SHOULD CAREFULLY STUDY THE DISCLOSURE DOCUMENT PROVIDED BY THE COMMODITY POOL OR TRADING MANAGER. YOU SHOULD PAY PARTICULAR ATTENTION TO THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS ATTENDANT TO ANY INVESTMENT BEFORE YOU INVEST.

YOU SHOULD ALSO BE AWARE THAT COMMODITY POOLS AND OTHER MANAGED FUTURES ACCOUNTS MAY TRADE FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE POOL AND YOU. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL OR ACCOUNT MAY BE EFFECTED.

THE INFORMATION PRESENTED HEREIN IS NOT AN OFFER TO SELL SECURITIES OR FUTURES ACCOUNTS OF ANY KIND.

ALL TRADING INVOLVES A HIGH DEGREE OF RISK. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE HAVE BEEN NO PROMISES, GUARANTEES OR WARRANTIES SUGGESTING THAT ANY TRADING WILL RESULT IN A PROFIT OR WILL NOT RESULT IN A LOSS.