Hedge Fund vs Mutual Fund, Understanding The Differences</h1> <article> <h1>Hedge Fund vs Mutual Fund, Understanding The Differences</h1> <p>2010-04-19T12:12:00.002-04:00</p> Hedge funds and mutual funds have many similarities, but many differences exist as well. Know the benefits of each before making the decision to invest.<br /><br /><br />In 1949 Australian Alfred Jones was credited with the term "hedge fund". Historically it derives its name from the use of hedging to manage risk while achieving superior returns. Today, a hedge fund is an un-regulated investment vehicle designated for sophisticated, also known as the "Accredited Investor".<br /><br />Mutual funds gained popularity in the 1980's. Prior to this time, the problem of the small investor was in obtaining sufficient knowledge to make informed investment decisions, and so the average person avoided stock market investing. Instead money was held in traditional savings accounts or placed with a bank in a Guaranteed Investment Certificate ("GIC") or Certificate of Deposit ("CD").<br /><br />What to do. The small investor was not able to obtain a professional money manager without $10 million or more to start. But what if he could pool his money with other small investors to reach this minimum threshold. And so the mutual fund was created to address these exact concerns.<br /><br />The mutual fund concept was simple, allow the un-sophisticated investor access to the strategies of the professional money manager. This was done by pooling small sums of money, as little as $20.00 deposited monthly. In return, the fund company would use professional money managers using professional investment strategies to easily out perform traditional bank savings products.<br /><br />The mutual fund investor had other problems. Because they did not understand the nature of the investments made for them, government regulators got involved to protect investor rights. And so mutual fund investing became regulated and soon took on a life of its own. Rules were set in place to govern what could be held within a mutual fund and how the investment strategies were marketed to the public. Even what could be invested and what should be avoided.<br /><br />While much evolution has transpired since the early days of the 80's. One thing is for certain, mutual fund investing is all about what it cannot do. While this article is not focused on these issues, there are some glaring examples the investor needs to know. In times of market un-certainty, the mutual fund cannot sell and move to cash for safety. The manager must remain fully invested at all times making the investor, in consultation with his Investment Advisor, responsible for proper asset allocation. The mutual fund also cannot employ risk management or hedging techniques because they are deemed too sophisticated for the small investor to understand. So to avoid investor complaints, these important strategies are discouraged by managers and outlawed by regulators.<br /><br />In the end, all of the benefits started by the mutual fund industry to provide safety of capital have been regulated away from the interests of the small investor. In fact, these are the exact investors which need safety of capital most of all. Many market observers believe the industry has become over regulated and as such, do more harm than good.<br /><br />To-date, the hedge fund industry has been able in all country jurisdictions to avoid nuisance government meddling. The recent wall street initiated financial melt down has proven that even a self regulated industry is not immune. It seems big company rights take precedence over investor rights. So some regulation may be forth coming. Historically, the hedge fund industry has been able to avoid regulation by offering its products only to the Accredited Investor. There is a strict agreed upon formula based on wealth accumulation. The premise being if you were smart enough to accumulate wealth, then you are smart enough to understand the sophisticated investments being recommended.<br /><br /> Typically hedge fund investors are in direct contrast to mutual fund investors and thus have different needs. The mutual fund investor has modest wealth and little investment knowledge. The hedge fund investor has significant wealth with greater investment understanding. Therefore one is regulated to protect the investor and the other is not.<br /><br />The above description is not the only difference that separates the two. Hedge funds can employ a complex strategy of investment vehicles known only to the fund manager. Many hedge fund managers are protective of any proprietary trading formula which will provide an edge over their competition and disclosure of their trading style is not required.<br /><br />Mutual funds are sold through an Investment Advisor who will make comparisons, explain and make recommendations for a balanced portfolio. Hedge fund investing can be more difficult. Firstly, there can be difficulty in locating a list of the availability of funds. There are however helpful data-bases for this. Then you must undertake your own due diligence to ascertain if it is the right asset mix for your overall portfolio.<br /><br />Thirdly, you'll need to have an understanding of the different investment strategies. Do you choose a value fund or a growth fund. <a href="http://www.co2climatefund.com/Sub_Advisor_CTA_Trading_Services.htm"> CTA funds</a> are out performing these days and what about a suitable bond fund. Does my fund employ hedging and should I invest in an off-shore fund to obtain the tax benefits.<br /><br />There are certainly many things to think about when selecting the proper investment vehicle. Make your selection with intelligence and proper planning. Ask around and be inquisitive. Your level of investment knowledge and the time needed to devote to this topic will dictate which is best for you.<br /><br /><br /><br />Dwayne Strocen is a registered CTA, Portfolio Manager. He manages the Global Climate Fund, an environmentally friendly hedge fund focused on the reduction of greenhouse gases. Website: <a href="http://www.co2climatefund.com"> http://www.co2climatefund.com</a> <br /> <br /><br />View more information about <a href="http://www.genuinecta.com/CO2_Carbon_Emissions_Hedge_Fund_Investing.htm"> hedge funds</a> and <a href="http://www.co2climatefund.com/Who_We_Are.htm"> Who We Are </a> </article> <article> <h1>Transparency In Hedge Fund Investing Is Critical</h1> <p>2009-11-22T11:53:00.003-05:00</p> Due to some recent high profile fraud cases within the hedge fund industry, many investors are seeking greater transparency from their investment managers. While many managers protect their proprietary trading programs, there is one sure fire way to address this issue.<br /><br /><br />Fund redemptions are nothing new. Every recession or bear market sees investors redeeming their fund investments and moving to asset classes which provide a greater degree of safety. For most, this is the Government Treasury Bill also called the T-Bill.<br /><br />While reasons for redemptions are as varied as the investment selections themselves, it seems that individual investors are uncertain of their understanding of what their money has been invested in. While mutual funds are marketed to the investor with a lower knowledge of investment products, the hedge fund has always been the investment choice for more knowledgeable investors or the "Accredited Investor". But now it seems even this group is calling for the need of greater understanding from their investment managers.<br /><br />The battle for returns which out perform the index has resulted in many Portfolio Managers refusing to disclose their trading program for fear others will duplicate their trading style. It is said by many managers that it's this ability to observe unique characteristics in the market place that differentiates their funds performance from the typical returns generated by bottom quartile performing funds and fund managers. Of course the unregulated hedge fund industry has perpetuated this myth by trusting the Accredited Investor with an above average knowledge of the market and his ability to select the correct investment for their portfolio. It seems the Accredited Investors does not always posses greater knowledge than their more un-sophisticated mutual fund brethren. <br /><br />So that bears the question of how to obtain this transparency to the satisfaction of the investing public? And the answer is the Managed Account.<br /><br />Managed Accounts are simply individual accounts opened in the name of the investor. These accounts are not pooled, yet they are identically structured and managed by the hedge fund Portfolio Manager in the same style as the pooled fund. The critical difference is the investors ability to see every trading transaction performed in the account by the fund manager.<br /><br />The popularity of the pooled investment structure is that investors do not have to deposit large sums of money to utilize the services of a professional Portfolio Manager. Most successful professional Portfolio Managers do not accept accounts less than US$10 million dollars. <br /><br />The hedge fund and mutual fund gained popularity by allowing smaller sums of money to be pooled with other deposits from many other investors. So while you can currently participate in a hedge fund investment for $100,000, and a mutual fund for $50., a managed account may require a minimum investment in excess of $1 million. Not so good for everybody.<br /><br />But lets suppose you can convince your hedge fund manager to accept your $100,000 what advantage do you gain.<br /><br />1. the investment account is actually in your name and not in the funds name;<br />2. your account is segregated from all other trading accounts;<br />3. instead of waiting for your monthly or quarterly statements, you can see the activity in your account on a daily basis in real time;<br />4. cash deposits or withdrawals can be simplified;<br />5. you have an overall increase of account transparency; and<br />6. you can no longer claim you did not know what was going on in your account. (oops, is that a benefit).<br /><br />There are also some disadvantages. Or put another way, the pooled investment structure provides some distinct advantages which originally made them popular since the first hedge fund was created in 1949. These funds should not be confused with the investment account managed by your stock broker. The professional Portfolio Manager will continue to exercise complete trading autonomy and does not want your advice on how to manage the assets in your account.<br /><br />Advantages for remaining in a hedge fund or mutual fund:<br />1. investors can obtain the services of a professional fund manager with smaller sums of money;<br />2. management costs are cheaper since it is more economical to manage one large account instead of many smaller accounts;<br />3. you pay one flat management fee, no commissions; and best of all<br />4. you still have someone to blame if things go wrong.<br /><br />It is estimated that the <a href="http://www.genuinecta.com/Sub-Advisor_Trading_Services.htm"> hedge fund</a> industry managed $2.7 trillion dollars by the end of 2008. The mutual fund industry manages $19 trillion investment dollars. So there is no question of the popularity of the industry since that first fund in 1949.<br /><br />If transparency is an issue for you, you need to take a long, hard look and evaluate the pros and cons wisely. Take some time to speak with your fund manager about a managed account, it just might be the alternative you've been looking for.<br /><br /><br />Dwayne Strocen is a registered CTA and derivatives analyst assessing market risk for institutional investors. He also manages the Genuine USA Index Fund, which is focused on the indices of the USA. Website: <a href="http://www.genuinecta.com"> http://www.genuineCTA.com</a><br /> <br /><br />View more information about his <a href="http://www.genuinecta.com/CO2_Carbon_Emissions_Hedge_Fund_Investing.htm"> managed account</a> program and about <a href="http://www.genuinecta.com/Trading_CO2_Carbon.htm"> trading </a>greenhouse gases. </article> <article> <h1>Consider A CTA Managed Fund For Balanced Asset Allocation</h1> <p>2009-08-28T21:31:00.002-04:00</p> <meta equiv="Content-Type" content="text/html; charset=utf-8"><meta name="ProgId" content="Word.Document"><meta name="Generator" content="Microsoft Word 9"><meta name="Originator" content="Microsoft Word 9"><link rel="File-List" href="file:///C:/DOCUME%7E1/HP_ADM%7E1.YOU/LOCALS%7E1/Temp/msoclip1/01/clip_filelist.xml"><style>  </style> <p class="MsoNormal"><span lang="EN-US" style="font-size:11;">There are many investment strategies for both the novice and sophisticated investor.<span style=""> </span>The CTA managed fund has been overlooked until recently.<span style=""> </span>Now the top performing investments are managed by CTA's and you should consider including these in your portfolio. <br /> <br /><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">You might be wondering what a CTA is.<span style=""> </span>A CTA is a Portfolio Manager for derivative products such as foreign exchange, commodities or futures.<span style=""> </span>If you're familiar with<span style=""> </span>traditional mutual funds or hedge funds, you'll know the investment decisions are made by a specialist in stocks or bonds.<span style=""> </span>These are also called equity and fixed income products.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">An equity fund is managed by an equity Portfolio Manager known as a CFA and a bond fund is managed by a fixed income Portfolio Manager also a CFA.<span style=""> </span>Their exists a third type of Portfolio Manager and that is one responsible for managing a fund which is invested in products like currency, carbon emissions, precious metals, agriculture products and others.<span style=""> </span>These Portfolio Managers are known as CTAs and they manage CTA funds sometimes known as a Managed Futures Fund.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">Despite the obvious, each investment style has its own unique characteristics.<span style=""> </span>For example, a traditional equity investor only makes money when the stock market is rising. They lose money during a falling or bear market.<span style=""> </span>Wouldn't it be fantastic to win no matter which direction the market went.<span style=""> </span>Well that is exactly what happens in a CTA fund.<span style=""> </span>The CTA can buy or sell at random.<span style=""> </span>We call this being "long" or "short".<span style=""> </span>When long, you're betting the market is going up and when short, you're betting the market is falling.<span style=""> </span>A CTA makes money no matter which direction prices are headed.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">Now that you know the basics, lets look at why CTA funds have out performed equity and bond funds.<span style=""> </span>Since September 2008 the wall street induced sub-prime mortgage fiasco has caused stock prices to plummet.<span style=""> </span>If you held an equity mutual fund or a stock portfolio of your own, you will have lost money.<span style=""> </span>In fact since Sept 1, 2008 the Dow Jones Industrial Average has lost 20.36 percent. According to the Managed Futures CTA database, the average CTA Fund YTD ROR (Rate of Return) to June 2009 is +2.14 percent.<span style=""> </span>That’s a whopping difference of 22.50 percent.<span style=""> </span>These funds are definitely worth looking at.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">A major advantage is the ability to trade the underlying commodity product.<span style=""> </span>Why buy a company that's involved in oil extraction when you can buy the oil itself.<span style=""> </span>The reason why stock market investing becomes difficult, is the many different factors that come into play.<span style=""> </span>There is the ability of management, economic pressure, competitive pressure, union demands, changing consumer habits and a host of other factors that determine the profitability of a company.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">A CTA fund has none of these issues to contend with.<span style=""> </span>Investors who purchase Aluminum or High Grade Copper on the New York Mercantile Exchange are affected only by issues of Supply And Demand.<span style=""> </span>During economic periods of growth, prices rise and during periods of recession, prices fall.<span style=""> </span>So while your equity fund is sitting on the sidelines waiting for a market re-bound, the CTA fund is profitably trading a falling market.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">I would be remiss if I did not discuss the use of leverage.<span style=""> </span>Unlike an equity fund, A CTA fund uses leverage.<span style=""> </span>For example, to purchase $100,000 Canadian Dollars cost only $350 to the CTA. So when the dollar rises from 91 cents to 92 cents, the fund makes a profit of US$1,000.<span style=""> </span>That equates to a 186 percent profit.<span style=""> </span>If we look at this from another angle it might become clear.<span style=""> </span>To purchase 1,000 barrels of crude oil at US$60 per barrel would cost US$60,000 to the cash consumer.<span style=""> </span>The NYMEX charges a deposit, we call this margin, of US$6,000.<span style=""> </span>Should Crude Oil rise to $65 dollars, the profit is $5,000 or 83 percent profit.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">Of course, the use of leverage can be dangerous as losses can quickly escalate.<span style=""> </span>Should Crude Oil have fallen to $55 instead of rising, a loss of $5,000 would have resulted.<span style=""> </span>Of course, CTA funds are not the only funds to utilize leverage.<span style=""> </span>Many equity hedge funds use leverage routinely and depending on your overall investment objective a balanced asset mix will dictate the percentage of your portfolio allocated to such a fund.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;">There are many types of <a href="http://www.co2climatefund.com/">CTA funds</a> to select from.<span style=""> </span>Agriculture funds, energy funds,<span style=""> </span>foreign exchange funds, index funds, fixed income funds and greenhouse gas or global warming funds.<span style=""> </span>Choose the one that’s right for you, but when balancing your investment portfolio don't over look<span style=""> </span>this important sector for proper and complete asset allocation.</span><span lang="EN-US" style="font-size:11;"> <br /> <br /></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span> <p class="MsoNormal"><span lang="EN-US" style="font-size:11;">Dwayne Strocen is a registered CTA, Portfolio Manager.<span style=""> </span>He manages the Global Climate Fund, an environmentally friendly hedge fund focused on the reduction of greenhouse gases.<span style=""> </span>Website:<span style=""> </span><a href="http://www.genuinectam/">http://www.genuineCTA.com</a></span><a href="http://www.genuinectam/"><span lang="EN-US" style="font-size:11;"></span></a></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:11;"> <br /> <br /></span><span lang="EN-US" style="font-size:11;"> <o:p></o:p></span></p> <span style=";font-family:";font-size:11;" lang="EN-US">View more information about <a href="http://www.genuinecta.com/CO2_Carbon_Emissions_Hedge_Fund_Investing.htm">hedge funds</a> and <a href="http://www.genuinecta.com/Trading_CO2_Carbon.htm">trading</a> carbon.</span> </article> <article> <h1>Strategic Partnership Agreement Between CTA Firm Genuine Trading Solutions And Leading Environmental Climate Change Consulting firm Karbone</h1> <p>2009-04-12T16:47:00.008-04:00</p> TORONTO, April 2009<span lang="EN-US" style="font-size:100%;"> – CTA Firm Genuine Trading Solutions Sign Strategic Partnership Agreement With Leading Environmental Credit Brokerage and Climate Change Consulting firm Karbone.</span><p></p><p class="MsoNormal" style="text-align: justify;"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoBodyText3"><span lang="EN-US" style="font-size:100%;">Genuine Trading Solutions President and CEO, Dwayne Strocen and Karbone Executive Director Izzet Bensusan announced today a Strategic Partnership agreement.<span style=""> </span>"The two companies will be pooling their resources to provide an enhanced product line of services to existing as well as future emitters of CO2 carbon emissions.<span style=""> </span>The conception for this Strategic Partnership is in response to calls from North American customers to provide a more integrated service" says Mr. Strocen.</span></p><p class="MsoBodyText3"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;">Working in a positive approach with Karbone to provide an enhanced service of OTC environmental credit brokerage is a step to providing greater integration of service in the form of both trading and managing risk.<span style=""> </span>In working together, both companies can now provide a greater range of expertise to a largely fragmented industry.<span style=""> </span>Mr. Bensusan<span style=""> </span>says "We believe the marriage of the OTC market and the exchange traded market is the natural evolution of a fledgling industry". And he adds "Our partnership will allow us to much better serve both of our US and Canadian customers with an expanded service line and local knowledge"</span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-size:100%;"><br /></span><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoBodyText" style="text-align: justify;"><span style="font-weight: normal;font-size:100%;" lang="EN-US">Recent meetings between the leaders of Canada and the United States has brought a renewed response and positive reaction to a national commitment for the reduction of <a href="http://www.genuinecta.com/CO2_Carbon_Emissions.htm">greenhouse</a> gases in North America.<span style=""> </span>Although specifics were not mentioned, it seems clear that government mandated regulation is not far off.<span style=""> </span>Taking a significant step forward to pre-empt government regulation will place this company as a leading edge provider in support of the Kyoto Protocol, the Regional Greenhouse Gas Initiative, Western Climate Initiative and the Specified Gas Emitters Regulation of Alberta.</span></p><p class="MsoBodyText" style="text-align: justify;"><br /><span style="font-weight: normal;font-size:100%;" lang="EN-US"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;">"We are pleased to extend our expertise into this exciting marketplace and believe the real winner is the carbon industry as it evolves to the ever changing demands of its participants", says Dwayne Strocen, Genuine Trading Solutions President and CEO.</span></p><p class="MsoNormal" style="text-align: justify;"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span style="font-size:100%;"><b><span lang="EN-US">About Genuine Trading Solutions<o:p></o:p></span></b></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;">Genuine Trading Solutions is a registered CTA firm specializing in exchange trading and risk management hedging of derivative products including <a href="http://www.genuinecta.com/Carbon_Emissions_Trading_Hedging.htm">carbon</a> emissions on the worlds climate exchanges.<span style=""> </span>The company is focused on providing a complete <a href="http://www.genuinecta.com/Risk_Management_And_Market_Risk.htm">risk</a> management service in reducing risk associated with adverse economic events, including greenhouse gases.</span></p><p class="MsoNormal" style="text-align: justify;"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;">Recently Genuine Trading Solutions announced its intention to launch a new hedge fund initiative for the benefit of ethically minded investors to participate directly in the reduction of greenhouse gases and credits.<span style=""> </span>The fund is clearly a viable choice for those investors interested in participating in socially responsible investing and making a statement regarding the environment.</span></p><p class="MsoNormal" style="text-align: justify;"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <h1><span style="font-size:100%;">About Karbone<o:p></o:p></span></h1> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;">Karbone is a global environmental credit brokerage and climate change consulting firm operating from its New York and London offices. The company advises its domestic and international clients on cost effective strategies and technologies to address climate change business risks. Karbone is founded on the principle of helping its clients to execute the most effective climate change strategy. Karbone bases this on ensuring its team has up to date knowledge on climate change related issues and environmental markets and access to the widest range of transaction capabilities for executing strategies. Karbone developed its climate change consulting and environmental credit execution group to meet the particular needs of our clients across multiple industries. This includes utilities, energy firms and specialized funds.</span></p><p class="MsoNormal" style="text-align: justify;"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">For more information please contact:</span></p><p class="MsoNormal"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">Genuine Trading Solutions Ltd.<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">Dwayne Strocen<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">Phone: +1 416 302 6282<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">e-mail: press@genuineCTA.com<u><span style="color:blue;"><o:p></o:p></span></u></span></p> <p class="MsoNormal"><span style="font-size:100%;"><u><span lang="EN-US" style="color:blue;">http://www.genuineCTA.com</span></u></span></p><p class="MsoNormal"><br /><span lang="EN-US" style="font-size:100%;"><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;"> <o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">KARBONE<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">Press Relations<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">Phone: +1 212 291 2900<o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-US" style="font-size:100%;">press@karbone.com<o:p></o:p></span></p> <p class="MsoNormal" style="text-align: justify;"><u><span style=";font-size:11;color:blue;" lang="EN-US"><span style="font-size:100%;"><a href="http://www.karbone.com/">http://www.karbone.com</a></span><o:p></o:p></span></u></p> </article> <article> <h1>Carbon Emission Trading, The Basics Explained</h1> <p>2008-12-13T16:35:00.001-05:00</p> The Kyoto Protocol of 1997 was signed by 38 signatory countries to address the issues of greenhouse gasses and resulting climate change issues. The following article will provide an understanding of trading greenhouse gas emissions.<br /><br /><br />The Kyoto Protocol is a UN-led international agreement reached in 1997 in Kyoto, Japan to address the problems of climate change and the reduction greenhouse gas emissions. The Kyoto Protocol went into force on February 2005.<br /><br />Signatory countries are committed to moving away from fossil fuel energy sources - oil, gas, and coal, to renewable sources of energy such as hydro, wind and solar power, and to less environmentally harmful ways of burning fossil fuels. Greenhouse gases such as carbon dioxide, methane and nitrous oxide are mainly generated by burning fossil fuels. Higher levels of greenhouse gas emissions cause global warming and climate change.<br /><br />The Protocol commits 38 industrialized countries to cut greenhouse gas emissions by 2008-2012 to overall levels that are 5.2 percent below 1990 levels. Targets for greenhouse gas emissions reduction were established for each industrialized country. Developing countries including China and India were asked to set voluntary targets for greenhouse gas emissions.<br /><br />The Canadian target for Kyoto is to reduce by 2012, greenhouse gas emissions by six percent below their 1990. The United States did not ratify the Kyoto Protocol, and in February 2002 introduced the Clean Skies and Global Climate Change initiatives, in which targets for reduction in greenhouse gas emissions are linked directly to GDP and the size of the U.S. economy.<br /><br />Trading of carbon emissions is linked to a program called Cap-and-Trade. Understanding this concept is necessary to begin effective trading. A central authority (usually a government or international body) sets a limit or cap on the amount of emissions discharged into the atmosphere. Companies that exceed the cap may be subject to fine or regulatory sanction. Therefore, those who find they cannot meet the conditions of the cap will look to buy credits from those who pollute less.<br /><br />Many older established companies are forced to spend considerable sums of money modernizing plants. In many instances this takes time, usually years to achieve. In contrast to new generation technologies which are not faced with up-grading facilities to comply with 1990 emission standards. Trading emission credits is a way for low emission companies such as wind farms to sell credits to benefit higher emitting companies. Cap-and-trade programs ultimately aid in being a net benefit to the host country by enabling it to meet it's commitment to the Kyoto Protocol Agreement.<br /><br />From the very beginning, this first phase of the European Union Emissions Trading Scheme, or EU-ETS, was intended to be a learning period to work out the kinks and entice major greenhouse gas emitters on board.<br /><br />On January 1, 2005, the EU-ETS came online with the cap-and-trade program covering approximately 12,000 installations including electricity production and some heavy industry. These 27 member countries of the European Union represents roughly 45 percent of total European CO2 emissions.<br /><br />Now three years later, amid a flurry of expectations and public controversy, the European Union has credible results to back up its claim of success. Recently, a Massachusetts Institute of Technology analysis of the EU Emissions Trading Scheme (ETS) affirms that despite rather unstable beginnings, the system has been an unprecedented success. More importantly, it opens the door for skeptical countries like the United States to follow suit.<br /><br />The United States would have been required to reduce its emissions 7 percent below 1990 levels had it accepted ratification of Kyoto. Instead, U.S. emissions have now risen more than 16 percent between 1990 and 2005.<br /><br />The Bush administration and Republican lawmakers opposed to emission caps have been touting the Asia-Pacific Partnership on Clean Development and Climate, which consists of Australia, China, India, Japan, South Korea, and the United States. The aim of the initiative, which began in 2005, is to foster cooperation on ways to improve clean energy development and lower emissions without global mandates. But since the initiative started, the United States, India, and China have come under increased domestic pressure to move toward mandatory emission controls. California is among several U.S. states that have entered into partnerships or passed laws for controlling greenhouse gases ahead of the federal government, leading to a showdown with congressional lawmakers. Major U.S. cities have also instituted a host of policies designed to cut greenhouse gases.<br /><br />Without the United States entering into a binding commitment, it is feared that several developing countries which have not yet signed plus some Kyoto signatories may be unwilling to agree to additional international commitments.<br /><br /><br />Dwayne Strocen is a registered Commodity Trading Advisor specializing in analyzing and hedging Market and Operational Risk using exchange traded and OTC derivatives. Website: <a href="http://www.genuinecta.com">http://www.genuineCTA.com</a>. <br> <br /><br />View in depth information about <a href="http://www.genuinecta.com/Carbon_Emissions_Trading_Hedging.htm">Carbon Emissions</a> and the benefits of<a href="http://www.genuinecta.com/Professional_Hedge_Fund_Advisors.htm"> hedging</a> its risk. </article> <article> <h1>The Role Of A CTA, Commodity Trading Advisor</h1> <p>2008-11-17T19:51:00.002-05:00</p> Today's Commodity Trading Advisor is no longer to be thought of only as a Portfolio Manager. His role has expanded considerably as investment products become more complex.<br /><br /><br />Commodity Trading Advisor, Genuine Trading Solutions, a registered CTA with the CFTC, says the responsibility today of a CTA is a constantly evolving role in today's market place.<br /><br />Once upon a time a Commodity Trading Advisor was content to be known as a Portfolio Manager trading commodities and futures for a managed futures fund. There is no question today's investor has become more sophisticated. In response, today's selection of investment products has become ever more complex and varied, the need for the CTA to understand the uses and management of these products becomes even more acute.<br /><br />So what exactly is the role of today's Commodity Trading Advisor. Certainly trading of derivative products for a managed futures fund continues to be as important as before. A CTA has also become more involved with derivative analytics. This role is essentially focused upon becoming an analyst to structure and analyze the more multi-faceted requirements demanded by hedge funds, pension funds and structured products.<br /><br />The use of derivative analytics to manage the adverse risk of an equity or bond portfolio brought about by adverse market conditions is critical in preserving asset growth. The uses of hedging to prevent volatility has long been understood by the largest institutions but is now available to the smaller sized company and to the individual investor. No doubt as products continue to evolve so too will the CTA evolve to meet the need of today's professional money manager.<br /><br />Derivative products are no longer limited to exchange traded commodities futures and options. There continues to be an ever expanding list of over-the-counter derivative products. These are SWAPS. SWAPS and privately transacted products transacted without the use of a recognized exchange. The difficulty is the buyer and seller must find each other to undertake such an arrangement, not always easy. The second problem is no liquidity. There is no one to sell this too should one of the parties wish to terminate the transaction prior to the agreed upon date.<br /><br />A Commodity Trading Advisor's role is no longer sufficient to be limited to trading. It is now imperative to understand the industry in a new light so to understand the changing investment environment. Analysis now becomes the catalyst to include a value added service to retain customers. This includes structured products, risk management and OTC derivatives. Continuing education has been and continues to be the hallmark of the best in the industry.<br /><br />Dwayne Strocen is a registered Commodity Trading Advisor specializing in analyzing and hedging Market and Operational Risk using exchange traded and OTC derivatives. Website: <a href="http://www.genuinecta.com">http://www.genuineCTA.com</a>.<br><br /><br />View more detailed information about <a href="http://www.genuinecta.com/Futures_And_Commodities_Trading_Advisor.htm">Commodity Trading Advisors</a> and understanding <a href="http://www.genuinecta.com/Learn_Futures_Trading_and_Commodity_Trading_Advisor.htm">how to trade</a> commodities. </article> <article> <h1>Market Risk – Not To Be Ignored or Overlooked</h1> <p>2008-11-17T19:50:00.001-05:00</p> Understanding Market Risk and the solutions available to mitigate or eliminate financial loss in today's global market.<br /><br /><br />The first of a two part article<br />Fund managers, whether they be equity or bond traders, know all too well that returns are not simply a result of their asset selection prowess. Many external factors come into play. But what are the issues facing the professional money manager. Management of risk is one of the most important, and not all fund managers analyze their market risk. This is often explained as a lack of education and a failure to understand the mitigating solutions for off-setting risk.<br /><br />Market risk is defined as "the unexpected financial loss following a market decline due to events out of your control." Stock or bond market volatility or market reversals can be the result of global events happening in far flung corners of the globe. Top analysts and fund managers simply do not have the resources to crystal ball gaze and predict those events.<br /><br />Examples of several major unexpected events that sent shock waves throughout the financial community have been:<br /><br />- 1982 Mexican Peso devaluation;<br />- 1987 stock market crash knows as "Black Monday";<br />- 1989 USA Savings and Loan Crisis;<br />- 1998 Russian Ruble devaluation;<br />- 1998 $125 billion collapse of Hedge Fund Long Term Capital Management;<br />- 2006 collapse of Hedge Fund Amaranth with losses of $5.85 billion.<br /><br />In 1994 Bank J.P. Morgan developed a risk metrics model known as Value-At-Risk or VaR. While VaR is considered the industry standard of risk measurement, it has its drawbacks. VaR can measure total dollar value of a funds risk exposure within a certain level of confidence, usually 95 or 99 percent. What it cannot do, is predict when a triggering event will occur or the magnitude of the subsequent fallout. For some company's and funds, a steep decline or protracted recession can be devastating. Even forcing some un-hedged firms into bankruptcy. A triggering event can have a ripple effect forcing people out of work and economies into recession effectively putting more people out of work. No person and no economy is immune.<br /><br />If you own a mutual fund, chances are your fund is un-hedged. Until recently, mutual fund legislation prevented mutual funds from hedging. Many jurisdictions have repealed this rule however mutual fund managers have been slow or decided to continue with "business as usual". The reason is that most investors of mutual funds are unsophisticated and do not understand the hedging process and may re-deem their money from an investment strategy they do not understand.<br /><br />Hedge funds on the other hand do not have these restraints. Investors are more sophisticated and are more open to the nature of hedge fund strategies. Some of which are not disclosed due to a fear of piracy by competing hedge fund managers.<br /><br />Risk reduction solutions are not complicated but do require the services of a professional who understands the process. This is the role of a Commodity Trading Advisor, also known as a CTA. While most CTA's are hedge fund managers, few specialize in risk management analytics. The focus of a risk manager is on the analysis of solutions to reduce or eliminate market and / or operational risk. No matter the role, all Commodity Trading Advisors are specialists in the derivatives market.<br /><br />The first step is the value at risk calculation to determine a funds risk liability. A risk mitigation strategy known as a hedge is then implemented. After all, identification of one's risk is only beneficial if a solution to off-set that risk is put into place. <a href="http://www.Professional_Hedge_Fund_Advisors.htm">Hedging</a> requires the use of derivatives, either exchange traded or over-the-counter. These can take many forms. The most commonly used hedging instruments are index futures, interest rate futures, foreign exchange, exchange traded commodities such as Crude Oil, options and SWAPS.<br /><br />A more detailed explanation of derivatives and hedging will be discussed in our next article. Now that we've identified an easy solution for your market risk worries, the implementation of the right strategy can be as easy as a call to a qualified and registered Commodity Trading Advisor.<br /><br /><br />Dwayne Strocen is a registered Commodity Trading Advisor specializing in analyzing and hedging Market and Operational Risk using exchange traded and OTC derivatives. Website: <a href="http://www.genuinecta.com">http://www.genuineCTA.com</a>.<br><br /><br />View more detailed information about <a href="http://www.genuinecta.com/Risk_Management_And_Market_Risk.htm"> Risk Management</a> and <a href="http://www.genuinecta.com/Foreign_Exchange_FX_Investing.htm"> Foreign Exchange Trading</a>. </article> <article> <h1>Hedging – What Is It, And It’s Uses In Risk Management</h1> <p>2008-11-17T19:49:00.003-05:00</p> <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-b7zQ1y_JZczrgvocCTYAbp8NTqzo4blB7NooIVI3RmxFACCg0TdzwD-ys49ukHbFcRdGKzEe5vIALvKAEjsM_1x-pL45US6NNBoiRNJSE5Nihk8TOpKcLF-hHBES04x_cIo5_f7P0xsS/s1600-h/GTS_logo.jpg"></a><br />Hedging, understanding the benefits of risk management in an enterprise wide solution. Risk management and hedging is a useful tool to reduce market place liability. Here are some tips on its uses.<br /><br />Second of a two part article<br />Before I discuss the use of hedging to off-set risk, we need to understand the role and the purpose of hedging. The history of modern futures trading began in Chicago in the early 1800's. Chicago is located at the base of the Great Lakes, close to the farmlands and cattle country of the U.S. Midwest making it a natural center for transportation, distribution and trading of agricultural produce. Gluts and shortages of these products caused chaotic fluctuations in price. This led to the development of a market enabling grain merchants, processors, and agriculture companies to trade in contracts to insulate them from the risk of adverse price change and enable them to hedge.<br /><br />The first commodity exchange was the creation of the Chicago Board of Trade, CBOT in 1848. Since then, modern derivative products have grown to include more than the agricultural industry. Products include Stock Indices, Interest Rates, Currency, Precious Metals, Oil and Gas, Steel and a host of others. The origins of the commodity and futures exchange was created to support hedging. The role of speculators is beneficial as they add trading volume and important volatility to what would otherwise be a small and illiquid market place.<br /><br />A bona-fide hedger is someone with an actual product to buy or sell. The hedger establishes an off-setting position on the futures or commodity exchange, thereby instituting a set price for his product. Someone buying a hedge is known as being "Long" or "Taking Delivery". Someone selling a hedge is known as being "Short" or "Making Delivery". These positions known as "Contracts" are legally binding and enforced by the exchange. You can view a complete listing of the worlds different exchanges at: <a href="http://www.genuinecta.com/World_Exchanges_Commodities_Trading_Advisors.htm">World Exchanges</a>.<br /><br />Entering your trades either for speculation or hedging is done through your broker or Commodity Trading Advisor. Commodity and Futures exchanges are distinct from Stock Exchanges, although they operate using the same principals. They are regulated by different agencies such as the Commodity Futures Trading Commission who are responsible for regulation of retail brokers in the USA as well as Commodity Trading Advisors who are really Portfolio Managers for derivatives.<br /><br />Now let's view some real life examples of hedging or mitigation of risk by using exchange traded derivatives.<br /><br />Example 1: A mutual fund manager has a portfolio valued at $10 million closely resembling the S&P 500 index. The Portfolio Manager believes the economy is worsening with deteriorating corporate returns. The next two to three weeks are reports of quarterly corporate earnings. Until the report exposes which companies have poor earnings, he is concerned of the results from a short term general market correction. Without the privilege of foresight, he is unsure of the magnitude the earnings figures will produce. He now has an exposure to Market Risk.<br /><br />The manager thinks of his options. The greatest risk is to do nothing, if the market falls as expected, he risks giving up all recent gains. If he sells his portfolio early, he also risks being wrong and missing further rally's. Selling also incurs substantial brokerage fees with additional fees to buy back again later.<br /><br />Then he realizes a hedge is the best option to mitigate his short term risk. He begins by calling his CTA (Commodity Trading Advisor) and after consultation places an order to sell short the equivalent of $10 million of the S&P 500 index on the Chicago Mercantile Exchange "CME". Now his result is when the market falls as expected, he will off-set any losses in the portfolio with gains from the Index hedge. Should the earnings report be better than expected, and his portfolio continues upward, he will continue making profits.<br /><br />Two weeks later the fund manager again calls his CTA and closes the hedge by buying back the equivalent number of contracts on the CME. Regardless of the resulting market events, the mutual fund manager was protected during the period of short term volatility. There was no risk to the portfolio.<br /><br />Example 2: An electronics firm ABC has recently signed an order to deliver $5 million in electronic components of next years model to an overseas retailer located in Europe. These components will be built in 6 months for delivery two months after that. ABC instantly realizes they are exposed to two risks. 1. the rising and volatile price of copper in 6 months may result in losses to the firm. 2. the fluctuation in the currency could easily add to those losses. ABC being a young firm cannot absorb these losses in view of the highly competitive market from others in the field. Losses from this order would result in lay-offs and possibly plant closures.<br /><br />ABC telephones their CTA and after consultation places an order for two hedges, both for an expiry in 8 months, the date of delivery. Hedge #1 is to buy long $5 million of copper effectively locking in today's price against further price increases. ABC has now eliminated all price risk. The risk of plant closures is greater than the lure of increased profit should copper price fall. After all, ABC is not in the business of speculating on copper prices.<br /><br />Hedge #2 is to sell short the equivalent of Euro Currency vs US Dollars. Since ABC is effectively accepting EC in payment, a rising US dollar and a weak EC would be detrimental and erode profits further. The result of the hedge is no risk and no surprises to ABC in either copper or currency levels. A risk free transaction and full transparency is the result. In 8 months with the order completed and the customer accepting delivery, ABC notifies the CTA to close the hedge by selling the copper and buying back the Euro Currency contacts.<br /><br />Many examples exist to demonstrate the mitigation of risk to an institution or financial portfolio. New products are constantly created and available on both over-the counter and exchange traded markets. It would be wise to consult with a qualified Commodity Trading Advisor or broker to discuss the analysis for an on-going risk management solution or a one time only hedge.<br /><br />Dwayne Strocen is a registered Commodity Trading Advisor specializing in analyzing and hedging Market and Operational Risk using exchange traded and OTC derivatives. Website: <a href="http://www.genuinecta.com">http://www.genuineCTA.com</a>. <br><br /><br />View in depth information about <a href="http://www.genuinecta.com/Professional_Hedge_Fund_Advisors.htm"> Hedging</a> and the benefits of<a href="http://www.genuinecta.com/Off-Shore_Services_Commodity_Trading_Advisor.htm"> Investing Off-Shore</a> </article> <article> <h1>Using Technical Analysis To Manage Risk And Maintain Top Quartile Performance</h1> <p>2008-11-17T19:46:00.003-05:00</p> <a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6zsNb8kt-POfNeMvI6q5PHq5sLis_-x3tx2LlmubyQ86qCqjO6eVS1UvADaA3koQOBozd5ADhtBcJOd4hDpRU4-SPv9KdjVTiLn0F54QNz0DXll57E0DRknRNqPLEf6jSCP0GQFVdGd1c/s1600-h/GTS_logo.jpg"></a><br />To manage an effective risk management solution requires more than the calculation of VaR. Ultimately a successful risk management program requires the execution of an effective hedge. Technical analysis is a vital element of this strategy.<br /><br /><br />Recent market reversals brought about by the Sub-Prime mortgage melt down is clearly a significant market correcting event. No matter if you work in the risk department of a large bank with many employees or a small fund of funds as co-manager, you share the same basic concerns regarding the management of your portfolio(s)<br /><br />1. how to maintain top quartile performance;<br />2. how to protect assets in times of economic uncertainty;<br />3. how to expand business reputation to attract new client assets;<br /><br />It remains common in the financial industry to hear experienced Portfolio Managers state their risk management program consists of timing the market using their superior asset picking skills. When questioned a little further it becomes apparent that some confusion exists when it comes to hedging and the use of derivatives as a risk management tool.<br /><br /><a href="http://www.genuinecta.com/Risk_Management_And_Market_Risk.htm">Risk management</a> analysis can certainly be an intensive process for institutions like banks or insurance companies who tend to have many diverse divisions each with differing mandates and ability to add to the profit center of the parent company. However, not all companies are this complex. While hedge funds and pension plans can have a large asset base, they tend to be straight forward in the determination of risk.<br /><br />While Value-at-Risk commonly known as VaR goes back many years, it was not until 1994 when J.P. Morgan bank developed its RiskMetrics model that VaR became a staple for financial institutions to measure their risk exposure. In its simplest terms, VaR measures the potential loss of a portfolio over a given time horizon, usually 1 day or 1 week, and determines the likelihood and magnitude of an adverse market movement. Thus, if the VaR on an asset determines a loss of $10 million at a one-week, 95% confidence level, then there is a 5% chance the value of the portfolio will drop more than $10 million over any given week in the year. The drawback of VaR is its inability to determine how much of a loss greater than $10 million will occur. This does not reduce its effectiveness as a critical risk measurement tool.<br /><br />A sound risk management strategy must be integrated with the derivatives trading department. Now that the Portfolio Manager is aware of the risk he faces, he must implement some form of risk reducing strategy to reduce the likelihood of an unexpected market or economic event from reducing his portfolio value by $10 million or more. 3 options are available.<br /><br />1. Do nothing - This will not look favourable to investors when their investment suffers a loss. Reputation suffers and a net draw down of assets will likely result;<br />2. Sell $10 million of the portfolio - Cash is dead money. Not good for returns in the event the market correcting event does not occur for several years. Being overly cautious keeps a good Portfolio Manger from achieving top quartile status;<br />3. Hedge - This is believed by all of the worlds largest and most sophisticated financial institutions to be the answer. Let's examine how it's done.<br /><br />Hedging is really very simple, and once you understand the concept, the mechanics will astound you in their simplicity. Let's examine a $100 million equity portfolio that tracks the S&P 500 and a VaR calculation of $10 million. An experienced CTA will recommend the Portfolio Manager sell short $10 million S&P 500 index futures on the Futures exchange. Now if the portfolio losses $10 million the hedge will gain $10 million. The net result is zero loss.<br /><br />Some critics will argue the market correcting event may not happen for many years and the result of the loss from the hedge will adversely affect returns. While true, there is an answer to this problem which is hotly debated. After all, the whole purpose of implementing a hedge is because of the inability to accurately predict the timing of these significant market correcting events. The answer is the use of technical analysis to assist in the placement of buy and sell orders for your hedge.<br /><br />Technical analysis has the ability to remove emotional decisions from trading. It also provides the trader with an unbiased view of recent events and trends as well as longer term events and trends. For example, a head and shoulders formation or a double top will indicate an important rally may be coming to an end with an imminent correction to follow. While timing may be in dispute, there is no question a full hedge is warranted. Reaching a major support level might warrant the unwinding of 30% of the hedge with the expectation of a pull back. A rounding bottom formation should indicate the removal of the hedge in its entirety while awaiting the commencement of a major rally.<br /><br />It is evident that significant market correcting events occur infrequently, in the neighbourhood of every 10 to 15 years. Yet many minor corrections and pullbacks can seriously damage returns, fund performance and reputation.<br /><br />If you have ever been confronted with upcoming quarterly earnings or a topping formation which has caused you to consider liquidation then you should have first considered a hedge used in conjunction with the evidence from a well thought out analysis of technical indicators. Together they are a powerful tool, but only for those who have the insight to consider asset protection as important as big returns. I guarantee your competition understands and so does your clients who are becoming more sophisticated each year. It's important that you do too.<br /><br />Dwayne Strocen is a registered Commodity Trading Advisor specializing in analyzing and hedging Market and Operational Risk using exchange traded and OTC derivatives. Website: <a href="http://www.genuinecta.com">http://www.genuineCTA.com</a>. <br> <br /><br />View in depth information about <a href="http://www.genuinecta.com/Trading_Financial_Commodity_Advisor.htm">Who We Are</a> and the benefits of<a href="http://www.genuinecta.com/Professional_Hedge_Fund_Advisors.htm"> hedging</a> your risk. </article> </main></body></html>