Mantis Trading : Premium Program

Summary

-Strategy The Mantis Trading, LLC ("Advisor") Premium Program is low volatility absolute return trading strategy designed to provide consistent positive returns with primary emphasis on capital preservation. The Premium Program is a multi-step process driven trading strategy which incorporates technical and statistical analysis coupled with a discretionary final decision making component. Strict risk management policies are incorporated into the trading process to minimize downside volatility. The strategy is implemented using a diversified basket of options on futures and futures contracts. The sectors represented in the Premium Portfolio include stock indices, foreign exchange (FX), interest rates, metals (base & precious), agriculture, and softs. The following is a brief overview of the trading process: 1. Technical analysis used to determine the existence and direction of a trend. 2. Statistical analysis of futures and options data to calculate an estimate of the forward distribution of prices. Analysis of current option volatility skew and of historical volatility is used to rank options. 3. Evaluation of risk/reward using scenario analysis. Fundamental analysis of markets to determine optimal timing of entries/exits. This includes event driven such as data releases and central bank actions. Analysis of seasonal tendencies. Advisor's extensive trading experience. Premium Program only takes trades on with favorable risk/reward characteristics and that have a high probability of being profitable. 4. The current outlook on trend direction combined with option rankings determine the type of trades that will be executed. Long option positions are used to take a directional view and are entered at low risk entry points which have high payoff ratios and defined downside risk. Short option positions are used in trending and non-trending markets to benefit from a perceived mispricing of options and from time decay. Spread trading is utilized to limit margin usage and for risk management when applicable. Superior Risk Management-Positions in the Premium Program are managed on a portfolio and individual position basis. Strict exit parameters exist to limit downside volatility. Correlations between positions are closely monitored to ensure proper diversification. Position Greeks are constantly evaluated to monitor exposure and to allow proper for delta hedging when needed. Premium Program Statistics: 75% technical/statistical, 25% fundamental/discretionary Return goal: 1.25%/month Annualized Volatility: <10% Annual R/T per $1M: 1,500 Timeframe of trades: Long options 1 month -9 month Short options 2 to 6 weeks Spread trading 2 weeks to 3 months Margin to Equity Usage: Average 20%, Max 40% Scalable program-The Advisor trades in units of $50,000 USD. Large and small accounts are able to participate in the Premium Program and have low variance in returns compared to the composite. The Advisor has built a strong infrastructure with multiple redundancies to reduce operational errors. The front and back office software is very efficient and flexible and allows the Advisor seamlessly manage dozens of accounts. The Premium Program's niche trading approach allows it to enter and exit positions with very little market impact Efficient use of margin-The Advisor strictly monitors all margin usage on a position and portfolio level. Average Margin/Equity ratio is 20% and a max of 40%; clients are able to leverage accounts 2X if desired. Managed Account Format/Full Transparency-Clients are free to choose Clearing FCM and have the ability to monitor daily trades and positions. Mantis Trading, LLC has no affiliation with any FCM or IB. Only exchange traded products are traded and therefore offer daily settlement by the marketplace. Low correlation to trend following CTA's-Premium Program can perform during trends and non-trending choppy environments. Premium Program has the ability to make directional and non directional trades in the options on futures and futures markets. Most trend following Cat's are trading price direction. The Premium Program trades price direction but also incorporates other dimensional aspects of option trading to capture returns.