Bluewater Trading LLC : Short Term Program

Summary

The last part of our process is a combination of mathematics and art. Our process is designed to ferret out the “duds” from what we “think” is an opportunity. Only methods that can be completely justified and mathematically proven are allowed into the mix. In keeping with our general strategy of minimizing our footprint we currently deploy five separate methods that perform well on various sectors.

Investment Strategy

Bluewater Trading's (BWT) managed futures strategy seeks to capitalize on opportunities in (22) liquid futures markets in the short term. Specifically, BWT uses a variety of proprietary tactical trading methods that in aggregate create aggressive but stable performance while maintaining a small market footprint.

Risk Management

BWT trading believes that risk management is preservation of capital during unfavorable market conditions. BWT utilizes general risk measures such as VaR, stress, etc. using in house software. However we feel these tools lead to a false sense of security.

Daily Risk: Managed using short term product (dynamic portfolio inherently manages risk), stop usage - each position represents approximately 30 bps risk to the portfolio and is constrained to lose no more than 10% in one day, experienced human overlay -risk manager with over 23 years trading.

Systemic Risk: Since much of our trading revolves around systematic trades, careful attention is also paid to this potential area of error. We address systematic risk with redundancy (backup location), human overlay (manual execution as needed), alternative data services, and a business continuity plan.