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Zephyr
Asset Management
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Access This Page Directly:
http://zephyr.altavra.com
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Program Description
Zephyr
Asset Management, LLC is a trading advisor that
studies financial markets with the goal of
developing and implementing strategies to generate
better than average growth to investment
portfolios. Zephyr Asset Management, LLC's trading
strategies seek to be flexible enough to profit in
rising markets as well as declining markets. (The
potential for loss is, of course, also equal.)
Additionally, Zephyr Asset Management, LLC trading
strategy has the potential to perform well in both
inflationary and deflationary periods (unlike
stocks).
The
Zephyr Asset Management strategy is based on the
belief that investments in stock indexes, not
individual stocks or sectors, hold more
possibilities for growth than day trading, swing
trading, trend following and "buy and hold"
strategies. Zephyr Asset Management, LLC believes
that their approach to investing will continue to be
more effective in repairing the damage that was
caused to portfolios by the bear market beginning in
2000 and in generating growth to new portfolios.
The markets do not operate in a static environment.
They are constantly changing. In order for Zephyr
Asset Management, LLC strategies to continue to work
it is necessary to continually evaluate where we
have been and where we are going and adjust
accordingly.
Zephyr
Asset Management, LLC trading strategy incorporates
five vital elements; fundamental analysis, technical
analysis, strategy, money-management and risk
assessment. Fundamental analysis is the study of
the economic environment, both marco and micro. It
is the study of supply and demand, interest rate
policy, labor productivity and monetary policies.
Fundamental analysis also considers the state of our
economy as well as the global economic and political
situation. The use of fundamentals assists in
recognizing potential trading opportunities and aids
in determining what the market is thinking and how
it might react. Technical analysis is the study of
price movement in the context of statistical and
probability outcomes. It is the study of price
pattern histories in order to predict how prices
might react in the future. The use of technical
analysis assists in determining a more favorable
entry or exit of Zephyr Asset Management, LLC
positions.
After
assessing both fundamental and technical conditions
of the market Zephyr Asset Management, LLC then
ascertains the best strategy. At the present time
Zephyr Asset Management, LLC believes that the
selling of premium through the S&P 500 futures index
is the best strategy. Proper money management is
imperative to the long term success of any
portfolio. We understand the importance of this
issue and are constantly implementing proper money
management techniques. The final element to our
plan is risk assessment. We are continually
analyzing the markets to ascertain the risks. Risk
assessment and money management work together.
There are times when we are fully positioned in the
markets and times when we are not depending on
Zephyr Assets Management, LLC opinions of the risk
assessment. Although risks cannot be eliminated and
profits cannot be guaranteed through money
management
and risk control, these two steps are vital for the
long term growth we wish Zephyr Asset Management, LLC
clients to attain.
Zephyr
Asset Management, LLC will take advantage of the
financial markets using diversified strategies.
Some of these strategies involve the selling of time
(calls and puts) on stock indices or other suitable
commodities. At times we may purchase calls and
puts to reduce margin or to take advantage of what
we believe will be a profitable trade based on
market conditions. We look for investment
opportunities trying to capitalize on the fear and
greed of the average investor. Zephyr Asset
Management, LLC will follow a long-term plan for
portfolio growth and protection. There are times
when Zephyr Asset Management, LLC is not in the
markets at all and others when we are fully
invested.
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Management Strategy
The first
step is analyzing the fundamental environment of the
market: Zephyr Asset Management, LLC then determines
the current trading range using technical analysis.
In essence, we are trying to determine where the
market will not go, as this is often easier then
determining where the market will go. Call and put
options are sold at different strike prices above
and below the predicted trading range. This is
generally, but not always, within 5 to 90 days of
expiration. If the market remains within the
expected range and does not produce a strong move in
either direction then the options sold will expire
worthless. Zephyr Asset Management, LLC is different
than the average person who buys options. We know
that most often, options expire at a loss to the
buyer and a gain to the seller. The reason for this
is simple. In order to make money buying an option
you have to be correct on three fronts: timing,
direction and volatility. To make money selling
options you do not have to be correct on all three
variables, most often one is enough. When selling
options time is our friend, unlike that of an option
buyer, in that each day the option is losing time
value or decaying in price.
In the event the market makes a strong move in one
direction then it might be necessary to buy back the
option before expiration. The strongest determining
factor is time. The farther away we are from
expiration the more likely it will be to cover the
option at a loss. Several other reason for covering
the position include to protect profits, to increase
the profit potential for the next expiration period,
to avoid or minimize a likely loss, or to free up
margin to take advantage of a different opportunity.
The selling of premium is repeated continuously,
market conditions permitting. This strategy helps to
maximize a profitable outcome for the client
regardless of the direction of the price movement of
the underlying index, so long as the index price
remains within the range of the strike prices of the
options sold. This strategy creates a potentially
profitable scenario, although not guaranteed, in all
types of markets.
The strategies’ main benefit is its flexibility.
Zephyr Asset Management, LLC is able to adjust for
individual’s risk tolerance. This is done by selling
calls and puts farther outside the range for a
conservative person and closer to the actual range
for a client who wishes to be more aggressive. In
addition, there is the ability to adjust the number
of options on either the put side or the call side,
which allows us to adjust to an index’s price
movement in any one direction. There is continuous
monitoring of positions in relationship to the price
movement of the market, volatility and economic and
political developments, both here in the United
States and abroad. Flexibility allows us to change
the trading range whenever it becomes advantageous
or necessary. This is always done at the end of
expiration but can also be done mid expiration if
the conditions merit.
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Management Information
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Kevin MacLean
Kevin MacLean
is Managing Director of Zephyr Asset Management,
LLC. Mr. MacLean worked on the floor of the Chicago
Mercantile Exchange from 1992 until April 2003
carrying out a range of different responsibilities.
Mr. MacLean was responsible for the Bear Stearns
Options Desk from April 1996 through February 2000.
At Bear Sterns Mr. MacLean managed the order flow
and execution of clients trading accounts. Mr.
MacLean became a registered floor broker after
leaving Bear Sterns and initiated the development
and implementation of a futures and options
Arbitrage desk specializing in the trading of S&P
500 futures contracts for Fimat USASociete Generale
in February 2000. Mr. MacLean then operated as Vice
President of Institutional Sales for Fimat
USASociete Generale and was responsible for advising
his clients on option strategies in addition to
placing discretionary trades. Upon leaving Fimat
USASociete Generale in October 2001, Mr. MacLean
established his own trading desk specializing in the
trading of S&P 500 futures options where he cleared
through LFG, Refco. Mr. MacLean was responsible for
executing trades for his clients worth more then 100
million. In April 2003 Mr. MacLean left the floor
and began trading private clients funds. In August
2004, Mr. MacLean joined forces with Mr. Natoli to
form Zephyr Asset Management, LLC.
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Joseph Natoli
Joseph Natoli
is Managing Director of Zephyr Asset Management,
LLC. Mr. Natoli earned his MBA from George
Washington University. Mr. Natoli began working for
Chesapeake Investment Services in July of 1998 under
the President, Yu-Dee Chang. In June of 2000 I
became registered as an Associated Person with the
NFA. As the Trading Desk Manager, Mr. Natoli was
responsible for 20 million dollars in client assets.
In his role as Trading Desk Manager he was
responsible for advising clients on option
strategies, placing discretionary trades and for
executing the trading strategies used at Chesapeake
Investment Service. These strategies included the
selling of options on the S&P 500 Futures contract
as well as many other commodities such as crude oil,
gold and silver. Mr. Natoli was also responsible for
going long or short other commodities such as wheat,
soybeans and cotton. Mr. Natoli was constantly
evaluating the commodity markets in relationship
with the clients existing positions and determining
if modifications were required as well as observing
over 20 different markets looking for opportunities.
This was accomplished through a combination of
technical analysis and fundamental analysis. Mr.
Natoli has been involved with the stock markets for
over 15 years. Mr. Natoli left the firm in May of
2003 and began trading private client funds. In
August 2004, Mr. Natoli joined forces with Mr.
MacLean to form Zephyr Asset Management, LLC.
The
descriptions above
are from the manager’s disclosure document.
THE
RISK OF LOSS IN TRADING FUTURES, OPTIONS AND
OFF-EXCHANGE FOREX
CAN BE SUBSTANTIAL. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS. PLEASE READ THE
CTA'S RISK DISCLOSURE DOCUMENT CAREFULLY BEFORE
INVESTING MONEY.
Disclosure Statement
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