Opportunity Trading Program | Equity Index Program

Client accounts are managed according to our proprietary U.S. Equity Index trading program. The program uses statistical analysis of a select group of broad-based equity indices to determine the bias, directional or stationary, of those equity indices. The identified bias can be an upward trend, a downward trend, a stationary trend, or no discernable bias. Additional analysis is then conducted to determine the strength of the bias and the level of confidence in the bias prediction. Finally, macroeconomic factors and market sentiment are considered, and positions are initiated via the trading of equity index futures or futures options.

Once we determine a tradable bias for a particular equity index, we then use futures and/or futures options to structure a trade intended to maximize the returns for the level of risk we deems acceptable.

In executing the program, the we may buy or sell futures on the equity indices. We may also initiate and adjust positions by buying or selling options on the futures. Options on futures that may be traded can be either call options or put options. In addition, the manager may sell uncovered put or call options to effect the strategy. During periods of large, single directional moves in the markets, uncovered option selling may result in substantial losses for the Client. Trading futures and futures options involves the use of significant margin, with the attendant risks.








Key Features & Benefits

Separately Managed Accounts (SMA's)
  • Advisor access to client's SMA limited to trading privileges pursuant to program
  • Only the client has authorization to move money in and out of account.
Total account transparency
  • Clients who open an account with online brokers, such as Interactive Brokers, receive daily statements detailing all account trading activity and direct online internet access to their accounts.
  • Client accounts are "marked to market" daily. Closing account value is updated daily.
IRS Section 1256 Tax Treatment
  • Gains and losses from trading activity are treated under Section 1256 of the IRC which allows for 60% long term and 40% short term capital gain or loss.
No lock up period
  • Clients can remove funds at any time. However, to minimize trading disruption and associated potential losses, Advisor highly recommends a 45 day notice to allow for adequate time to liquidate positions
Flexible & Low minimums
  • Unlike many hedge funds or managed accounts which require account minimums of $1 million or more, we accept accounts starting at $500,000 tailored to your circumstances







Fees & High-water Marks

Management Fee
  • 2% annualized fee based on net liquidation value of the client's account accrues monthly and is paid quarterly to QuantScape.
  • Example: On January 1, account value is $1,000,000. By January 31, account value has increased to $1,100,000. Management fee for January is
     
     $1,100,000 x 2% / 12 = $1,833.33
Incentive Fee
  • 20% of net new profits are paid quarterly to QuantScape,. No incentive fees are charge until all existing losses, if any, are recouped. This recouping of losses before incentive fees are paid serves as a high water mark.
  • Example with Incentive Fee: If the net asset value for the account at the end of January was $1,100,000, the net new profits for the month would be $100,000 and the incentive fee accrual for the quarter to to the end of January would be $20,000.

     $100,000 x 20% = $20,000.00

  • Example with loss resulting in no Incentive Fee: If the net asset value of the account at March 31 is $1,000,000, which means there was a loss of $100,000 between month end January and March 31, no incentive fees would have accrued, since net new profits would be zero.

     $0 x 20% = $20,000.00

High-water mark in the form of Net New Profit
  • Incentive fees are paid only in the case of net new profits. If no net new profits are generated, no incentive fee is charged. Prior losses from past months are carried forward and charged against net profits. Only when prior losses are made whole and net new profits are created by the quarter end are incentive fees charged.
  • Example Net New Profits: Account has no prior losses going into a quarter. During the quarter, trading results in $20,000 of profit, commission for the trading comes to $680, $1,020 of management fees were deducted, and there was no other charges against the account. The net new profit for the quarter would be $18,300.

     $20,000 - $680 - $1,020 = $18,300.00

  • Example Net New Profits with Prior Loss: Account has prior losses of $5,000 going into a quarter. During the quarter, trading results in $20,000 of profit, commission for the trading comes to $680, $1,020 of management fees were deducted, and there was no other charges against the account. The net new profit for the quarter would be $13,300.

     $20,000 -$5,000 - $680 - $1,020 = $13,300.00








How To Invest

We are currently not accepting new accounts for this program.









Disclaimers

IRS Circular 230 Disclosure: QuantScape Asset Management LLC does not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with QuantScape Asset Management LLC of any of the matters addressed herein or for the purpose of avoiding U.S. tax related penalties.

QuantScape Asset Management LLC is referred to herein as QuantScape. This website is for distribution only as may be permitted by law. It is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or would subject QuantScape to any registration or licensing requirement within such jurisdiction. It is published solely for information purposes; it is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained in this website (the Information), except with respect to Information concerning QuantScape. The Information is not intended to be a complete statement or summary of the securities, markets or developments referred to in the website. QuantScape does not undertake to update or keep current the Information. Any opinions expressed in this website may change without notice and may differ or be contrary to opinions expressed by other business areas or groups of QuantScape.

Nothing in this website constitutes a representation that any investment strategy or recommendation is suitable or appropriate to an investor�s individual circumstances or otherwise constitutes a personal recommendation. Investments involve risks, and investors should exercise prudence and their own judgment in making their investment decisions. The financial instruments described in the website may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky.

The value of any investment or income may go down as well as up, and investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance. Neither QuantScape nor any of its directors, employees or agents accepts any liability for any loss (including investment loss) or damage arising out of the use of all or any of the Information.

Any prices stated in this website are for information purposes only and do not represent valuations for individual securities or other financial instruments. There is no representation that any transaction can or could have been effected at those prices, and any prices do not necessarily reflect QuantScape's internal books and records or theoretical model-based valuations and may be based on certain assumptions. Different assumptions by QuantScape or any other source may yield substantially different results.



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