Protec Energy Partners LLC : ET1

Summary

Protec Energy Partners, LLC is a Florida based Commodity Trading Advisory Firm with an emphasis on oil derivatives trading. The Program is characterized by relatively short term (one to six months), low turn-over, reversion-to-mean option strategies. The Protec team has extensive trading experience in both the physical energy and financial derivatives markets.

"The rates of return shown in the above Performance Capsule may vary materially among managed accounts due to multiple factors inherent in the ET1 program. This variance, however, is primarily due to longer-term trend-following option positions that existing clients hold in which new clients will not participate. It may take new clients several months to have comparable trading positions."

Investment Strategy

Protec Energy Partners ET1 program depends on both technical and fundamental considerations. Technical analysis involves the study of price charts, volume and momentum to determine the future course of prices. Other analysis will be performed on the prices of various options, both in absolute terms in relation to their historic price level, and in relative terms comparing the prices of puts to the prices of similar calls. Implied and historical volatility of both the option and its underlying commodity are also studied. Fundamental considerations, utilized on a commodity by commodity basis, include supply and demand, seasonal movements as well as business and economic factors, governmental policies, weather, and other worldwide events, which can influence the energy commodity markets. In the ET1 program, the focus is to implement medium-term strategies including option spread structures, strangles and straddles. In addition, the Advisor may purchase or sell futures to offset an open option position. Our ongoing re-balancing process is designed to keep an account’s degree of leverage relatively constant, even in volatile markets. PEP’s principals years of experience in the physical petroleum and natural gas markets enables them to better understand the external forces that affect the trading markets. Along with a strong understanding of market fundamentals, technical analysis is used to help more precisely time entry and exit strategies. PEP trades energy commodities including but not limited to crude oil, gasoline, heating oil and natural gas with trade allocations between the commodities based on potential risk vs. reward.

Our ongoing re-balancing process is designed to keep an account’s degree of leverage relatively constant, even in volatile markets. PEP’s principals years of experience in the physical petroleum and natural gas markets enables them to better understand the external forces that affect the trading markets. Along with a strong understanding of market fundamentals, technical analysis is used to help more precisely time entry and exit strategies. PEP trades energy commodities including but not limited to crude oil, gasoline, heating oil and natural gas with trade allocations between the commodities based on potential risk vs. reward.

Risk Management

The firm employs strict proprietary risk control procedures in an effort to preserve capital and protect against material forecasting errors. Particular attention is given to the adequate sizing of positions prior to execution, and the need to assess the current and anticipated liquidity of the segment of the market. We calculate a predetermined level of acceptable loss per position based on volatility and risk-reward dynamics. If this predetermined acceptable loss is exceeded, the position is closed.