The Capital Appreciation Program:
Spreads ‐ A Unique Approach to the Energy Sector
Tyche Capital Advisors, LLC is a New York based registered commodity trading advisor currently offering
trading programs to qualified investors. Through its trading programs, TCA will engage in speculative trading
of futures and options contracts offered on the United States commodity exchanges and overseas futures
exchanges. Tariq Zahir and Steve Marino are the firm’s owners and principals.
As an investor, you need an investment management firm that understands your needs – a partner with a
solid reputation and documented results. At Tyche Capital Advisors, our mission is to find and manage
financially rewarding alternative investment strategies in the exchange traded futures markets for those
accredited investors who want to grow their financial wealth, manage risk and successfully achieve their
We fulfill this mission through our guiding values. This means being active in the way our industry evolves
and continually striving to provide unmatched services to our clients. It also means educating our clients;
making the complex financial situation easy to understand. Every activity and contract we undertake is
handled with the highest standards of professionalism. Given the nature of our business, this value is vital.
We manage our business with an intense focus on producing work and materials of the highest quality and
value. Professional, quality work also requires that materials are concise, clear and organized so as to
ensure close attention to detail. As a professional money management business, we have a responsibility
to ensure that all matters on behalf of the services we provide are handled in a timely and equitable
manner. Our main goal at Tyche Capital Advisors is the Relentless Pursuit of Excellence. This embodies
all of the other principles and much more. It means continually striving to improve our company and our
Capital Appreciation Program
TCA recognizes the crude oil and refined energies futures market as one of the most vital commodity markets
for the world economy driven by a multitude of interdependent factors. We maintain the philosophy that
trading the spreading opportunities available in the forward curve of crude oil and distillates provides a
unique investment and trading strategy. This coupled with a clear set of strictly adhered to risk management
methodologies designed to manage portfolio risk exposure, make up a robust asset management model that
effectively trades the liquid global crude oil and energy markets.
The Capital Appreciation Program is a portfolio management and trading platform that systematically
trades the forward curve of crude oil via a collection of proprietary quantitative and analytical computer
software algorithms coupled with fundamental discretion. The program’s curve analysis module
continually evaluates and monitors the crude oil forward and back curve’s past, present, and projected
slope, probability of change, and direction based on a number of proprietary algorithms and statistical
analysis techniques. This analysis and predictability is critical to the success of this trading strategy and
provides the guidance to analyze and project the path, performance, and strength of the movement of the
spreads created by this curve. It also provides vital indicators which attempt to anticipate changes to the
curve and therefore allow the trading strategy to take advantage of these changes through position and
equity allocation methodologies.
Inside The Capital Appreciation Program
The program is comprised of several core modules that handle various aspects of the trading and
management of assets allocated to the strategy including: 1) a trading signal module which triggers
position entries and exits, 2) a position management module that handles position stops and trails that
systematically manages profit/loss targets and thresholds, 3) a margin to equity ratio module which
maintain appropriate account equity exposure and position leverage scenarios, and 4) a risk
management module that incorporates several multilevel equity risk algorithms designed to manage
portfolio risk while capturing profitable trades. These modules continually work in conjunction with one
another to form a systematic end-to-end asset management platform.
- Trades signals are generated daily, however trade executions typically only occur a few times a week, it
is not uncommon for an entry and exit in the same position to occur intraday depending upon market
volatility. With that said, there are times when trade signal signals may not be executed for several days or
weeks also due to market movements and volatility.
- Positions are typically held anywhere from 2-3 days up to and sometimes in excess of several weeks or
months depending on position, portfolio goals, and market volatility.
- Typically uses 5% to 9% of margin to equity ratio and, very rarely, no more than 15% which we find is a
level and fits our conservative portfolio risk exposure methodology.
- As the model is trading the forward curve it is not uncommon to have multiple positions concurrently
along the curve either as a, stand-alone, complementary, or offsetting positions.
Tyche Capital Advisors uses a pro-active management style of monitoring and managing investments in
relation to risk, return, capital requirements, and market directions. Policies are in place to adjust
positions as needed. TCA uses conservative margin to equity money management strategy that is designed
to keep leverage at levels which attempt to avoid extreme portfolio volatility.
The Capital Appreciation Program places a huge emphasis on effective portfolio risk management to
reduce exposure through effective management of leverage via appropriate margin to equity ratios.
While the futures market incorporates highly leveraged products, the model only uses a small percentage
of this leverage, typically 5-9%. This allows for positions to capture conservative profits, while monitoring
drawdowns and manage overall portfolio risk. Portfolios are managed with a proprietary margin to equity
ratio methodology and systematic algorithms which provides a structural framework to monitor and
manage portfolio exposure through continued position monitoring and scaling. In addition, portfolio risk
exposure is managed at various times through position diversification, vertical spreading strategies, and
inter and intra commodity positions as those opportunities present themselves. Multilevel Portfolio risk
management algorithms constantly monitor position draw downs on a position by position basis. We find
this controlled and conscious approach to managing position profits and losses, as well as, portfolio
exposure provides a methodology that is unique to trading the highly volatile energy markets through