Bayland Capital Management, LLC : The Bayland Trading Program (P)

Summary

Bayland Capital Management, LLC is an alternative investment management firm engaged in the management of commodity futures trading accounts for qualified investors. Bryan Bonner is founder and President of Bayland Capital Management, LLC. The Bayland Trading Program uses a proprietary systematic approach that attempts to identify behavioral characteristics and then establishes either long or short positions when those characteristics exist in significant enough force that the price behavior may be expected to persist for a sufficient length of time. The approach is primarily mechanistic, but some limited amount of discretion is used in certain situations which include, but are not limited to, in which delivery months positions are held, which markets are considered viable for the strategy, how new accounts incorporate existing positions, and how much risk the strategy as a whole will accept.

Investment Strategy

The Bayland Trading Program uses a proprietary systematic approach that attempts to identify behavioral characteristics and then establishes either long or short positions when those characteristics exist in significant enough force that the price behavior may be expected to persist for a sufficient length of time. The approach is primarily mechanistic, but some limited amount of discretion is used in certain situations which include, but are not limited to, in which delivery months positions are held, which markets are considered viable for the strategy, how new accounts incorporate existing positions, and how much risk the strategy as a whole will accept. Combining multiple approaches in a unified strategy, the Advisor utilizes long and short positions to seek maximum profits amidst varying durations of price movements. The Advisor believes that diversification among trading approaches increases the number of market environments from which its program can extract profits. The Bayland Trading Program will trade futures and options in a broad array of markets, including, but not limited to, equity indices, government bonds, energies, grains, livestock, precious and base metals and others, traded on U.S. and non-U.S. exchanges.

Risk Management

Positions are established to take advantage of developing trends and managed to limit downside risk during unfavorable market conditions. Effective risk management is a crucial aspect of the trading program. With the goal of limiting potential loss, the Advisor uses risk assessment techniques. Account size, expectation, volatility of market traded and the nature of other positions taken are all factors in deciding whether to take a position and determining the amount of equity committed to that position. Protective stops may be used to control risks. There are times when the Advisor’s trading program is fully positioned in the markets and times when it may not be in the markets at all depending on assessment of the reward and risk ratio. The program is geared toward absolute return. Thus, despite the risk management of the Advisor, the Advisor’s trading will be volatile and there is an inherent downside risk.